Bitcoin [BTC] has closed at lower lows for two consecutive days for the first time in ten days. At press time, Bitcoin traded at $62,714, down 1.04% on the daily charts. Amid this price pullback, traders, especially whales, have begun shorting the market.
Bitcoin whale opens a $31M short
As BTC faced rejection, falling to $62k, a whale jumped into the market and opened a short position.
According to Onchain Lens, a whale opened a 40x short position on 493 BTC worth $31 million. With BTC declining, the whale is already sitting on $220k profit after spending $2k in funding fees.
Moreover, the whale’s decision to open a short position showed strong pessimism, anticipating the market to continue declining.
Interestingly, this was not an isolated case. After briefly spiking above 1 across all exchanges, the Long/Short Ratio fell back to 0.97 as of writing.
At this level, it indicates that most traders opened short positions over the past day, reflecting strong bearish sentiment and expectations of another decline.
BTC traders take a step back
Besides shorting the market, Bitcoin traders have turned cautious on the derivatives market. According to CoinGlass data, derivatives volume declined by 29%, while Options Volume declined by 32%.
The decline in these two metrics indicated reduced speculative activity and weakening market participation. Thus, traders are opening or closing fewer trades, a major sign of declining market interest, as traders opted for a wait-and-see approach.
Notably, declining volume, especially amid ongoing market weakness, reduces the likelihood of major price swings.
Is BTC at risk of further slip?
After the recent slip, the market momentum has remained relatively weak. While the MACD has risen above the signal line, it remained negative at the time of writing. Thus, although the bearish trend has recently weakened, it has yet to turn bullish.
Furthermore, the positive DMI index was below both ADX and -DI, suggesting the trend remains weak. Based on these two indicators, the downtrend seems strong and positioned to continue.
If the prevailing trend continues, Bitcoin could drop to $60k again before attempting another leg up. To invalidate this downtrend, Bitcoin needs to reclaim $64k, thus flushing bears shorting the market.
Final Summary
- A Bitcoin whale opened a 40x short position on 493 BTC worth $31 million.
- Bitcoin’s market structure continues to weaken as derivatives traders adopt a wait-and-see approach.
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