Bearish investors in bitcoin have started to cover their short positions, suggesting selling pressure may be waning after concern over the cryptocurrency’s future wiped out some $38 billion in value in the past week.
Short positions on Bitfinex — the world’s second-largest cryptocurrency exchange — were at around 9,300 bitcoins ($59 million) on Monday, according to bfxdata.com, which tracks data on the bourse. That’s about a third of the roughly 28,000 bitcoin shorted as of Nov. 7, before a surprise decision to cancel a technology upgrade that prompted some users to switch out of bitcoin in favor of rival bitcoin cash.
The current short positions are the lowest since July, right before tensions soared ahead of a divisive split that resulted in the birth of bitcoin cash. Back then, the contracts dropped to a low of 6,000 bitcoins, before soaring to a record 43,000 bitcoins, according to bfxdata.com.
Meanwhile, traders betting on gains have increased their long positions to 23,000 bitcoins as of Monday, from 18,000 bitcoins a week ago. On Monday, the digital currency was down 2.7 percent in late Asian trading.