February 19, 20194min1160

One More Sign Suggests Possible End of the Crypto Winter

The bitcoin market may be about to see another wave of buying, one measure of sentiment among traders suggests.

According to data from crypto exchange Bitfinex, the ratio of short-to-long trades in the bitcoin market has hit 0.68 – the lowest level since early August last year. A short-to-long ratio below 1 indicates that there are more traders who believe in higher prices, than those who believe in lower prices.

While a “long trade” involves buying an asset in anticipation that its price will rise, a “short trade” happens when a trader places a bet that the price of an asset will fall, by borrowing the asset and then selling it in the market. The trader’s goal is then to buy back the asset at a lower price later, and pocket the price difference as his profit.

During the past six months, we have often reported on this ratio reaching record-high levels as a sign that there may be too many traders positioned on the long side of the trade, which may lead to sharp reversals in the price. This time, however, the ratio is far from extreme levels, suggesting that the recent bitcoin rally may still continue for some time.

Bitcoin short-to-long ratio on Bitfinex. The blue horizontal line indicates equilibrium between short and long trades:

One More Sign Suggests Possible End of the Crypto Winter 102

Meanwhile, the total value of the short trades on Bitfinex has also dropped. More than just indicating that the bullish sentiment has increased, this also suggests that the overall interest in bitcoin trading is picking up.

As of press time on Tuesday (UTC 06:20 AM,) the total value of BTC/USD longs on Bitfinex was BTC 27,906, down slightly from more than BTC 38,000 on Monday – the highest level in 11 months. Meanwhile, the value of all short positions on the same exchange was just 19,152 BTC, indicating that the sentiment is shifting to more bullishness for bitcoin. However, it remains to be seen how long it will last.

Bitcoin short trades in red and bitcoin long trades in blue on Bitfinex (using 7-day moving averages):

One More Sign Suggests Possible End of the Crypto Winter 103

Moreover, market sentiment towards top coins is also improving, as reported on Monday.

After jumping by almost 5% in the past 24 hours, Bitcoin is still trading above USD 3,900, while ethersurpassed USD 147 and XRP is up to USD 0.32.


About us

We are the new economy news hub. 2100NEWS is the professional index, data, and tools provider in the digital asset space, offering Crypto Market Intelligence, providing the perspective you can trust and equipping you with information edge you need to stay ahead. (Real-time data of token issuers and news, analysis and commentary from community.) We are very excited to contribute to the evolution of the industry and build an ecosystem around our offering (the institutional-grade data infrastructure required to enable institutional investments in digital assets). We want our contributions (Contents and Tools on 2100NEWS.com) to be useful for helping investors.


CONTACT US

CALL US ANYTIME



Latest posts



Newsletter


    • ethereumEthereum (ETH) $ 3,575.66 2.06%
    • litecoinLitecoin (LTC) $ 94.46 0.07%