Analysis

FTX collapse sees Bitcoin, Ethereum to be shorted the second and third-most amount

On-chain information exhibits that Bitcoin(BTC) is at present the third-most shorted cryptocurrency ever, whereas Ethereum(ETH) stands because the second-most shorted.

BTC funding rates
Supply: Glassnode

Analyzing the common funding charge (in %) set by exchanges for perpetual futures contracts, it may be noticed above that lengthy positions periodically pay brief positions each time the speed proportion turns into optimistic. Alternatively, when the speed dips in the direction of the unfavorable finish of the chart, brief positions may be seen to pay lengthy positions periodically.

Occasions marked a low within the BTC cycle may be noticed above in March 2020, Summer time 2021, June 2022, and November 2022.

ETH funding rates
Supply: Glassnode

In second place concerning shorting, ETH was possible solely shorted extra throughout the Merge occasion because of the ‘purchase the rumor, promote the information’ contagious mentality on the time.

We’ve got seen the steepest dip towards unfavorable funding charges in latest historical past by means of September. Regardless of the decline, the assumption that shorting will drag a worth to zero usually snaps again – forcing consumers so as to add gas to the rally.

To verify this reversal for the occasions forward, it’s anticipated that additional weeks of deep unfavorable funding shall be required earlier than a snap-back occasion happens.

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