Shorts of Most Top Coins Were at 2018 Highs Yesterday, Today We Saw a Short Squeeze

Shorts had been building up to 2018 highs for BTC, LTC, ETH, XRP, etc recently. Yesterday, after a week or more of losses, as shorts approached or exceeded 2018 highs for most top coins, we saw what appeared to be a short squeeze.

What happened was that BTC flew up a couple hundred dollars in seconds, alts followed, and shorts came down just as quick.

Shorts could have been forced to liquidate, or they could have closed manually, but because it happened so quick the event is likely well explained as a short squeeze.

This formed what is potentially a bearish reversal pattern in BTCUSD shorts called a double top (see the image above; a double top on the retest of a high is very rarely a bullish sign, especially considering BTC is right near its historic $6k support).

As we stand here after the “squeeze,” short interest on the top coins is still near 2018 highs and many alts are down 80% – 90%+ and sitting on top of 2017 support (the price range from 2017 is acting as support here in 2018 on many alts). Meanwhile, you have the top coin, BTC, resisting $6k over and over again.

Bottoming is generally a long drawn out process, so it makes sense to see $6k revisited over and over as the amount BTC goes over that becomes smaller and smaller as time moves on (essentially forcing BTC into a tighter and tighter range).

Nothing says this is the bottom of the 2018 bear market, in fact conservative investors should assume the bottom isn’t anywhere near in (they should be looking for a long bottoming range toward the next supports in the $4k – $5k range and some volume spikes for confirmation of a bottom and then later a breakout), but BTC resisting $6k over and over as short interest increases and forms bearish patterns does offer a somewhat favorable setup for those long or going long in crypto.

TIP: To see short interest on top coins type in BTCUSDSHORTS on Trading View or ETHUSDSHORTS, or XRPUSDSHORTS, etc. That will show you short interest on Bitfinex which is a good guage of what is happening market-wide.

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...

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