Following a recent increase in Bitcoin price to above $86,000, traders on Bitfinex have significantly reduced their long positions, raising numerous questions about future market prospects.
Situation with Position Reductions on Bitfinex
From April 17 to April 19, traders on Bitfinex reduced their long positions in margin contracts by over $100 million. This reduction occurred prior to Bitcoin's price surge, prompting analysts to speculate that large players might be anticipating a price correction or lack confidence in short-term gains.
Bullish Sentiment Among Crypto Investors Remains
Despite the reduction in long positions, the total number of margin long positions on Bitfinex stands at 79,136 BTC, equivalent to approximately $6.86 billion. This indicates that large players still maintain a bullish stance, as short positions remain negligible.
Correlation Between Prices and Long Positions on Bitfinex
Onchain data shows that Bitcoin's price does not always correlate strongly with changes in leveraged positions on Bitfinex. For example, in March, when long positions increased by 13,454 BTC, Bitcoin's price actually declined. This highlights that significant market changes can occur independently of large traders' actions.
Thus, the reduction of $106 million in long positions is not a reliable indicator that professional traders are turning bearish. On the contrary, the overall preservation of margin long positions indicates a strong infrastructure for further Bitcoin growth.
