Short Bitcoin Inflows Rise as the Bearish Market Waves Continue

Short bitcoin inflows have been rising over the past couple of months. While BTC recently recovered and retouched $25,000, bearish sentiment continues to prevail. Hence, causing the inflow of short bitcoin to increase over time. Bitcoin is trading at $20,221, 1% lower than yesterday and an 8% drop over the last week. On the other hand, the global crypto market cap is at $986.22B, a 0.97% increase over the last day.

Short Bitcoin Inflows Continue to Rise

The rise in short bitcoin inflows has been happening for several months. In 2022, when ProShares introduced its short bitcoin exchange-traded fund, it saw record-breaking BTC flows. After this, the interest in the fund decreased, but it quickly picked up again.

The most prominent example was when the price of bitcoin fell below $21,000. That was a reversal in sentiment, as it had risen to its all-time high earlier in August. However, as the month has closed, investors have started to focus on shorting bitcoin.

The surge in the Proshares Bitcoin Index (BITI) during the week ended August 29 pushed it to a new all-time high of 4,310 BTC. However, this is nowhere near the current long-term exposure of the exchange-traded fund. The sudden rise in the index’s value suggests that investors are becoming more pessimistic about the future.

Greed and Fear Index Still Low

The sudden spike in BTC price has been linked to the short bottoms it has experienced over the past couple of months. On July 1, the first time this happened, it was at around 3,811 BTC, while the price of the digital currency had dropped below $20,000. On July 13 and 26, the same pattern occurred. The bitcoin price fell below $20,000 before increasing to around $20,000.

It accounts for a 70% surge in the previous two weeks, with 4,310 BTC exposure to short bitcoin ETFs. That is mostly due to the deteriorating market sentiment; the Fear & Greed Index now shows a score of 23, which indicates that the market is still extremely fearful.

Given the current market trajectory, this is not in the least surprising. For at least a few more months, the cryptocurrency market might remain in a bearish trend. Analysts expect short exposure to digital assets like bitcoin will continue to increase.

CAKE Shows Rising Wedge Recovery

The emergence of a rising wedge formation that triggered a bullish reversal was the catalyst for the price action in CAKE. However, after re-igniting the selling pressure, the price moved to the upper range of the support and resistance ranges. According to Coingecko, the company’s pancake swap is currently trading at $3.75.

Before the price can test the resistance range, it should bounce back from the trendline support. That would allow buyers to extend their gains. The EMAs’ movement also causes the slow-moving phase. A strong break above the trendline support could give the bulls the upper hand and accelerate their rally. However, a break below the support could cause a choppy move. Despite a broken-down trendline, the 20 EMA was able to bounce back and close above the 50 EMA.

If the price breaks below the trendline support, it could trigger a sell signal and test the support at $4.2-$4.4. A slide below this level could also confirm a bullish invalidation.

Meanwhile, the relative strength index supported the price action, which crawled past the midline support. That indicated that the selling pressure was easing. However, it’s still important to maintain a position above the 50 levels to maintain the bullish bias. On the other hand, the Chaikin Money Flow indicator showed a little easing.

CAKE could face resistance at the $4 area, a potential hurdle that could prevent the current rally from reaching the trendline support. However, a sustained close above the 20 and 50 EMA would confirm the bullishness of the current move.