Since crypto prices have fallen to their lowest point, now is the ideal time to “Buy-the-Dip.” But during these brief price declines, traders appear to be shorting cryptocurrency more than they are buying it.
Buy-the-Dip Sentiments Does Not Stop Crypto Shorting
More short sales or shorting occur in altcoins than in bitcoin. In the past day, short holdings in Bitcoin (BTC) have averaged roughly 51% across exchanges, while short positions in altcoins have averaged about 55%.
BTC/USD hovers around $20k. Source: TradingView
Santiment, an on-chain analytics tool, states that data on the average funding rate for Bitcoin and altcoins relative to the price of bitcoin shows that traders continue to short altcoins at every minor decline. The long/short ratio for Bitcoin, in contrast, is unchanged despite price swings.
As prices gradually fell on Sunday, traders have shown that though they may proclaim to be buyingthedip, they are shorting more on these mini drops. Interestingly, this only applies to altcoins right now, indicating that Bitcoin is being flocked to as the safe haven.
According to Coinglass data, traders kept shorting crypto on Monday. In the last 24 hours, a $25 million liquidation of Ethereum (ETH) witnessed 56 percent shorts. Polkadot (DOT), Solana (SOL), XRP, Cardano (ADA), and BNB, meanwhile, saw 55 percent, 59 percent, 63 percent, 67 percent, and 53 percent shorts.
Related reading | Bitcoin Perpetual Open Interest Suggests Short Squeeze Led To Crash
Bitcoin and Altcoin Short Selling. Source: Santiment
It’s interesting to note that in the past 24 hours, short positions in Tether (USDT) have increased by 85% across exchanges. Some short sellers think that Chinese real estate brokers back the majority of Tether’s assets in commercial paper. Since the previous month, USDT has experienced significant redemptions, causing its market cap to drop close to $66 billion.
Amidst a dim market outlook, hedge funds are also progressively shorting the U.S. dollar-pegged stablecoin Tether (USDT).
Liquidation OF Altcoins Rises Amid Short Selling
Liquidations are also increasing as traders continue to short altcoins. Altcoins that were actively traded in the morning are currently in the negative. Due to a recent increase in liquidation, the price of Ethereum (ETH) has decreased by around 4% during the past 24 hours. Other altcoins have also given up gains and are currently declining.
Related reading | Doom To Fail: Tether Shorts Pile In As Hedge Funds Seek To Profit From Crypto Winter