Cryptocurrency prices have dipped to the bottom making it a perfect opportunity to “Buy-the-Dip”. However, traders seem to be shorting more than buying crypto during these small price drops.
Altcoins are witnessing more short-selling or shorting than Bitcoin. In the last 24 hours, Bitcoin (BTC) saw about 51% short positions across exchanges, whereas altcoins recorded on average 55% shorting.
Short Selling Rises Despite “Buy-the-Dip” Sentiments
According to on-chain analytics platform Santiment, data on Bitcoin and altcoins average funding rate vs. Bitcoin price reveals that traders continue to short altcoins at every small dip. Whereas, Bitcoin’s long and short ratio remains stagnant as prices fluctuate in a range.
Bitcoin and Altcoin Short Selling. Source: Santiment
“As prices gradually fell on Sunday, traders have shown that though they may proclaim to be buyingthedip, they are shorting more on these mini drops. Interestingly, this only applies to altcoins right now, indicating that Bitcoin is being flocked to as the safe haven.”
As per data by Coinglass, traders have continued short-selling of altcoins on Monday. Ethereum (ETH) saw 56% shorts amid a liquidation of $25 million in the last 24 hours. Meanwhile, Solana (SOL), XRP, Cardano (ADA), Polkadot (DOT), and BNB recorded 55%, 59%, 63%, 67%, 53% shorts, respectively.
Interestingly, Tether (USDT) has seen an 85% shorting across exchanges in the last 24 hours. Some short sellers believe that most of Tether’s commercial paper holdings are backed by Chinese property dealers. USDT has seen massive redemptions since the last month, which caused its market cap to fall near $66 billion.
Moreover, hedge funds are increasingly shorting U.S. dollar-pegged stablecoin Tether (USDT) amid a weak market outlook.
Altcoin Liquidation Rises Amid Short Selling
While traders continue to short altcoins, liquidations are also rising. Altcoins that were trading strongly in the morning are now in red. Ethereum (ETH) price has fallen nearly 4% in the last 24 hours, as liquidation rises in the last few hours. Other altcoins have also lost gains and are now falling.
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