Shorting Bitcoin has Been a Terrible Idea This Past Month

CryptoMode Shorting Bitcoin With US Currency

Derivatives trading is prevalent where volatile assets such as cryptocurrencies are concerned. However, going against the market and shorting Bitcoin is often a horrible decision. In the past month, numerous shorters have had their positions liquidated. 

Shorting Bitcoin is Asking for Trouble

It is understandable why people want to short Bitcoin. Numerous analysts, including Peter Schiff, do not believe this asset has any value. Instead, they appear stuck in their way of thinking. For them, shorting Bitcoin is an attempt to dissuade others from buying BTC. Such a decision can work out, but not in late 2020. 

More specifically, shorters are getting liquidated left, right, and center since mid-November 202. Bitcoin’s price may have gone sideways for a while, leading some to believe the bullish momentum comes to an end. However, in reality, Bitcoin now trades at over $23,000 and shows no signs of slowing down. Shorting Bitcoin today is not advised.

CryptoMode Shorting Bitcoin Losses

Judging by the chart above, shorters have lost a lot of money in the past month. Although long positions face similar liquidation concerns, they suffer far less loss recently. An intriguing development that confirms this recent Bitcoin bull run has been brewing for some time. With no end in sight, maintaining a long position seems to be the sensible approach. 

On November 26, those shorting Bitcoin lost a lot of money. Over $1.57 billion in shorts got liquidated on that day alone. A substantial amount, considering most of these positions belong to Binance traders. These charts also confirm how there is no real ‘balance” between traders going short or long. One or the other will always be the dominant trend, as a 50/50 split will hardly happen. 

Bitcoin Doesn’t Care About Your Position

In recent years, there have been concerns over how derivatives traders may manipulate the Bitcoin market. While that may have been the case at some point, the current landscape looks very different.

Bitcoin’s momentum beats to its own drum, regardless of what some influencers want to see. A positive sign for the market as a whole, as this asset still has much upward price potential.

Shorting Bitcoin in late 2020 – even with new all-time highs taking place every day now – seems like a bad idea. It is plausible to assume there will be some Bitcoin correction. At the same time, BTC may very well hit $40,000 or more in the months to come. 

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