Bitcoin has fallen below the $27,000 support but even this has not eliminated the bullish signals that surround the cryptocurrency. With a good number of traders still choosing to bet against the price of the pioneer cryptocurrency, the odds that a price reversal is on the horizon have become higher.
Bitcoin Shorters Take Center Stage
As shown in a report that was shared by on-chain data tracker Santiment, crypto investors are becoming increasingly short on Bitcoin. The chart that was posted on X (formerly Twitter) shows short positions completely overwhelming the long positions for now.
Now, in times where long positions are dominating, it means that long traders are paying shorts, and in this case, prices are more likely to drop. Likewise, when short positions dominate the market, short traders will be paying longs to hold their positions and the possibility of a rally goes up.
Short positions dominate BTC | Source: Santiment
The same trend was observed back in August when shorts dominated the market and Bitcoin surged to $28,000 before correcting back downward. If this same trend holds, then a similar surge would see the Bitcoin price rise above $30,000.
The Santiment post also points out that the price of Bitcoin has been performing well since the increase in short positions began. “This has a good probability of continuing,” the on-chain tracker said.
Factors Driving A Possible Recovery
While the shorters dominating Bitcoin is a bullish signal, there are other factors that point toward a price rally. One of these is the fact that the Bitcoin Fear & Greed Index has moved upward into neutral territory for the first time in September.
Given that the index jumped from 45 representing fear last week to 47 representing neutral today, it points to a move toward the greed territory. In simpler terms, this means that investors are more likely to put money into the market. More money means more demand and more demand translates to higher prices.
Furthermore, Bitcoin has been able to clear the 20-day moving average, and as it continues to trade above this level, it points toward a higher probability of BTC going up versus down, especially in the short term. This meeting of bullish signals and recovering positive sentiment creates an atmosphere for the cryptocurrency to thrive.
At the time of writing, Bitcoin is changing hands at $26,990, down 0.65% on the daily chart, but still holding 2.67% gains on the weekly chart.
BTC price takes a bow to $26,700 | Source: BTCUSD on Tradingview.com
Featured image from CNBC, chart from Tradingview.com