Bitcoin shorts, whales, and the next move – Is a V-shaped rebound in play?

Key Takeaways

Are BTC bulls in management?

3% rebound is perhaps extra of a bear entice, than a mark of actual spot demand.

Ought to merchants load shorts?

With no dip-buying in sight, opening shorts seem like strategic. Previous flash crashes have seen V-shaped recoveries, however this bounce isn’t assured to flip right into a full rally but.

Final week’s Bitcoin [BTC] dump reminded us the place the true motion is – Derivatives. Coincidence or not, large BTC shorts cashed out, pocketing enormous income from BTC’s almost 8% drop in below 72 hours.

Nonetheless, extreme greed cuts each methods. In actual fact, Coinglass data revealed $620 million worn out within the final 24 hours, with shorts taking the larger hit – Accounting for roughly 67% of complete liquidations.

And but, OG whales are nonetheless HODLing shorts. With that setup, one other brief squeeze could possibly be on deck as BTC picks up momentum. Query is – Will this bounce keep a bear entice or flip right into a breakout?

BTC rebounds as market calls Trump’s bluff

Historical past reveals us that flash crashes are the final word crash course for merchants. 

Even earlier than Trump’s “don’t fear about China” tweet, the market known as the bluff. On Polymarket, the odds of China tariffs tanked from 25% to 10%, exhibiting that the market was pricing in a near-zero likelihood of escalation.

Trump’s Fact Social post later confirmed it, backing the market’s learn. The end result? BTC managed to dodge a Q1-style flash crash, again when it nuked by almost 30% as tariffs went reside worldwide. 

Supply: TradingView (BTC/USDT)

Consequently, merchants are actually pricing in one other V-shaped rebound. 

Again in April, when BTC dumped by 10% in below 10 days on the “Liberation Day” FUD, the flash crash was adopted by a clear V-recovery because the crypto reclaimed the $82k-range and ripped to new highs quickly after.

Nonetheless, that setup didn’t repeat itself throughout the August $124k ATH, when the value didn’t reclaim its prior excessive. This time, a vertical re-capture of $125k is vital. To drag that off, the cryptocurrency wants to indicate this bounce isn’t only a brief squeeze.

Will Bitcoin bulls flip the script on greed?

On the time of writing, BTC shorts gave the impression to be piling in, hinting at indicators most merchants is perhaps lacking.

At $117k, the “winner” whale who banked $192 million throughout the flash crash is again, loading a $163 million brief at 10x leverage, with a liquidation worth of $123k. The place’s already sitting on $2.5 million in floating P&L.

Nonetheless, is that this simply greed? Based on Santiment, prime whales are bleeding out, trending decrease with zero dip-buying motion – An indication of warning for bulls.. Merely put, the standard “purchase the worry” play isn’t taking place proper now.

Supply: Santiment

In opposition to this setup, loading shorts is perhaps good. 

With weak bid assist, BTC’s 3% bounce would possibly learn extra like a traditional bear entice than actual spot demand, preserving weak fingers in management. Till that flips, a V-shaped run to $125k will stay too far-fetched for now.