Despite seeing a rebound in Bitcoin prices recently, signs point to a possible continuation of the downward trend in the future. The significant number of short selling positions on standard contracts on the CME, particularly from institutional investors, indicates a bearish sentiment towards Bitcoin. These investors are not just speculating on the decline of the cryptocurrency but are also aiming to capitalize on profitable opportunities. Hedge funds have now become key players in this risky game.

Given the current economic situation, the yield gap between USD and Bitcoin has fueled a trend known as the Bitcoin "carry trade." This strategy involves betting on the weakening of Bitcoin to benefit from the yield differential. However, this approach carries risks of increased volatility, especially with leveraged short positions from hedge funds affecting price fluctuations. Any hint of weakness in Bitcoin could trigger a wave of significant selloffs.

In summary, the accumulation of short positions by speculative funds is putting pressure on Bitcoin prices, while the allure of the potentially lucrative "carry trade" is encouraging institutional investors to persist with their bearish strategies. This combination of factors suggests a possible correction phase for Bitcoin in the near future.