Bitcoin Nears All-Time High—Why Traders Are Doubling Down on Shorts

Bitcoin's rally to the brink of record highs has triggered a surge in bearish bets—but this isn't your typical 'buy the dip' moment.

Short sellers pile in as BTC tests resistance

The king of crypto flirts with its ATH while futures traders stack contrarian positions. Some see an overbought market begging for correction; others smell blood in the water as leverage builds.

Wall Street's usual 'risk management' playbook? More like a roulette strategy—except the house always wins.

Bitcoin has been trapped in a relatively tight range since early May, trading between $100,000 and $110,000 with three tests of each level of support and resistance.

Technical indicators like relative strength index (RSI) continue to paint a bearish image with several drives of bearish divergence, with RSI weakening on each test of $110,000.

The recent influx of short positions could well be lower timeframe traders capitalizing on the range, shorting resistance before reversing their trade at each test of $100,000.

This rang true on June 22 when the long/short ratio shot up to 1.68 as bitcoin momentarily slumped through $100,000 before bouncing.

There is a potential bull case with the increase in short positions: a short squeeze. This WOULD occur if bitcoin begins to trigger liquidation points and stop losses above a record high, which would cause an impulse in buy pressure and continuation to the upside.