Is Short Bitcoin ETF Exposure Gearing Up For A Squeeze?

Bitcoin’s brief publicity has been gaining favor from each retail and institutional buyers during the last couple of months. For many, this place within the digital asset has paid off, given its continued decline over this time. Even then, buyers haven’t eased up of their publicity to this funding automobile. The entire property beneath administration for brief bitcoin ETF are on the rise, sparking speculations of a possible brief squeeze.

Traders Improve Publicity

When the ProShares Quick Bitcoin ETF first debuted earlier in 2022, it got here out with a number of assist from buyers. These buyers have been already used to longing bitcoin by the supplied ETFs however had lastly gotten the power to brief the digital asset in a bear market. It was one of many largest crypto ETF launches, reaching greater than 3,000 BTC in publicity in lower than a month.

Since then, there was a considerably regular enhance in publicity to this ETF. By the top of August 2022, it had touched a brand new all-time excessive of 5,335 BTC. This adopted the decline of the value of BTC under $19,000, making a development of elevated publicity every time the value dipped.

This development has additionally continued into the month of September, which has been a brutal month for the digital asset. The Quick BTC ETF publicity had declined in the beginning of September as buyers took revenue, however it had begun to develop as soon as extra, nearing all-time excessive values.

ProShares’ BITI touches 5,270 BTC in publicity on September twenty third, the Third-largest thus far since launch. This enhance had, as soon as once more, coincided with the drop within the worth of bitcoin to the low $18,000s earlier than staging a restoration.

Bitcoin Quick Squeeze Coming?

The elevated publicity to brief bitcoin ETFs might very nicely be main to a different brief squeeze. Traders had already begun taking earnings from their place, resulting in greater than $5 million in outflows final week, however they proceed to carry sturdy in shorting the digital asset.

Now, buyers placing in more cash throughout native bottoms might imply that they have been buying and selling in a nasty approach, however it is usually essential to notice that the market has continued to development decrease with every latest dip. This has additionally had an affect on spot buying and selling as there’s much less shopping for and extra promoting occurring.

BTC worth recovers above $19,000 | Supply: BTCUSD on TradingView.com

If the demand for brief BTC continues to rise and attain a brand new excessive, a ensuing brief squeeze might see the value of bitcoin plunge to $17,000 as soon as extra. A slight change within the present investing development, which is more cash flowing into the brief BTC ETF even when the value of bitcoin is in restoration, can simply result in this. 

Bitcoin’s worth remains to be exhibiting a weak restoration, which provides credence to the brief positions being assumed by buyers. It’s weakly holding on to the $19,000 degree. So additional decline might push Quick BTC publicity to a brand new excessive.

Featured picture from BeInCrypto, charts from Arcane Analysis and TradingView.com

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