Why Short Bitcoin (Is Shorting Bitcoin or Going Long Better?)

08/15/2023 06:18 • Blockchain Briefs • 48 views

Why short Bitcoin? Why short Bitcoin?

In a recent research report, we analyzed the risks and returns of the cryptocurrency market from a perspective. It indicates that although there are many factors that cause panic and losses for investors, it does not represent the entire value of the investment portfolio, nor does it include any fundamental or financial impact. Therefore, it is a very attractive signal for those who want to trade volatile cryptographic assets at lower prices. When you try to buy these investment products, you first need to understand whether market sentiment, technical indicators, and price changes are one of the main reasons for their rise.

However, compared with other assets, this issue seems less important-because most cryptocurrencies are subject to regulatory restrictions in traditional financial markets. However, with more and more institutions entering, they will become more specialized, targeted, and may be seen as a new investment tool. As mentioned earlier, “If someone owns a large amount of BTC, he will sell it.” Despite such risks, and Bitcoin is also a “viable investment” form, in many cases, people still consider Bitcoin as a good long-term reserve asset.

So what exactly is shorting Bitcoin? In fact, there are many reasons for shorting Bitcoin:

1. Due to the bear market in the current market, some speculators choose to sell. And others tend to buy. This situation usually occurs after the end of the Bitcoin bull market (or before the decline). For example, when Bitcoin rises to $10,000, there will be a large-scale selling pressure.

2. When Bitcoin falls to around $6,000, investors start to look for arbitrage opportunities, and vice versa. Therefore, shorting Bitcoin can achieve higher returns.

3. Even in the short term, it is possible to have a liquidation event in a short period of time. However, there has not been a significant increase in the price of Bitcoin at present.

4. Various strategies have emerged in the past year or so, and the most famous one is to profit from futures contracts. But the current situation in the market is not like that.

5. Despite the recent market riots, the price of Bitcoin is still far higher than the historical high since February of this year. As of the time of writing, the price of Bitcoin is $57,250. After reaching a historical high in September 2018, the price of Bitcoin has been running above and below the range of $50,000 to $60,000.

6. If the price of Bitcoin continues to strengthen, the price of Bitcoin is likely to return to above $40,000. But there is still a long way to go to restore the market.

Is it better to short or go long on Bitcoin?

According to OKEx spot, as of the start of the European session, BTC is reported at $9,730 (-1.42%).

The price has fluctuated around $9,500 since last night. From the 1-hour chart, the market has been running within a downtrend channel. The BOLL is in a narrowing state, with the upper resistance at around $9,160, and the middle support above $9,200. Overall, is it better to short or go long on Bitcoin?

1. BTC rebounded to $9,600 and showed a trend of stabilizing and rising;

2. The daily oscillation range of Bitcoin is $9,700 to $10,200;

3. BTC continues to fall below $9,000 before showing signs of stop loss.

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Why Short Bitcoin (Is Shorting Bitcoin or Going Long Better?)

Is it better to short or go long on Bitcoin?

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