The price of Bitcoin continues to grapple with bearish sentiments as short traders assert control over BTC derivatives markets in anticipation of the upcoming US Federal Reserve rate announcement.
Is Bitcoin’s price teetering on the edge of a significant reversal below the $60,000 mark?
Bitcoin Short Traders Gain Upper Hand in Derivatives Markets
Since its rejection at the all-time high of $73,840 on March 14, Bitcoin has been ensnared in a downward trajectory. Market activity has stagnated as investors exercise caution in light of the impending Federal Reserve rate announcement scheduled for 2 pm Eastern Time (ET) on March 20.
With recent inflation data surpassing expectations for the previous month, short traders in the Bitcoin market have aggressively accumulated leveraged positions over the past week. Their strategy anticipates that another rate hike could exacerbate downward pressure on Bitcoin’s price.
Coinglass’ liquidation map reveals the extent of leverage employed by traders in their speculative positions, particularly around the 10% margins of current prices.
With less than 24 hours remaining until the Federal Reserve meeting, leveraged short trades on Bitcoin currently outweigh long positions by a significant margin.
According to data, short traders have amassed leveraged positions valued at over $2.43 billion within the 10% margins of current prices. This starkly contrasts with long leverage contracts, which presently stand at $943 million, as of the current writing on March 20.
Following the flow of capital, it becomes evident that the majority of traders are bracing for a potential downturn in Bitcoin’s price following the upcoming rate announcement, signaling prevailing bearish sentiment in the market.
