Long positions taken on Bitcoin on the popular crypto exchange Bifinex are nearing an all-time high, all while the leading cryptocurrency by market cap continues to fall.
It could suggest that a very large whale is taking a massive position in Bitcoin ahead of the upcoming halving, in preparation for a rally and bull market. Is a market maker ready to move the price of Bitcoin higher and set a bottom? What does past data suggest?
Bitcoin Longs Near All-Time High on Bitfinex, But What Does This Mean?
Crypto analysts take into consideration every possible piece of data they can get their hands on, and often look at volume, open interest, volatility, and other metrics in addition to review price patterns. Another metric often used, is the balance of long versus short positions taken in Bitcoin across a number of cryptocurrency exchanges.
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The metric is so commonly used, even TradingView provides separate charts for BTCUSD Longs and BTCUSD Shorts on leading cryptocurrency exchange Bitfinex.
Some traders argue that performing technical analysis on such a chart is useless, however, the ratio between the two position types, and either side spiking one way or another can be helpful information for analysts to take into account to gauge current market sentiment or conditions.
One of those key metrics has reached a level that’s just about on par with its all-time high, reaching 38,800 BTC worth of long positions – or roughly $280 million at today’s Bitcoin price.
Speculation points to the positions being taken by a massive whale on Bitfinex, who is preparing for Bitcoin to set a local bottom, and begin a new early 2020 rally leading into Bitcoin’s halving event.
Past Results Cannot Determine Future Moves, TD9 Flips Sell on BTCUSD Longs
Past data shows that the last time BTCUSD Longs reached such a high was back in February 2019, months prior to Bitcoin taking off on yet another parabolic rally.
However, looking back further, BTCUSD Longs also reached such a high point in March of 2018, just before Bitcoin’s bear market really took hold.
The conflicting data makes it difficult to decide with any certainty if the current spike in BTCUSD Longs is bullish, or bearish.
Interestingly, the TD9 Sequential indicator has triggered a 9 sell signal on the daily chart for BTCUSD Longs, which could hint at a massive correction in the metric which has spiked to nearly all-time high levels.
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The reversal in BTCUSD Longs would only come from those long orders closing for some reason, whether they are in profit thanks to a massive Bitcoin rally, or because the price of the asset fell so steeply, the long traders had to close to prevent further losses from occurring.