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Bitcoin: Late short sellers could face losses as prices…

2min Read

The stable price action after the breakout downward suggested this could be the calm before the storm- which way is Bitcoin poised to go?

Bitcoin: Late short sellers could face losses as prices stabilize above $29k

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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Bitcoin faces uncertainty, with a news event expected to yield large volatility.
  • Further downside after collecting liquidity above the $30k mark was possible.

Bitcoin [BTC] fell below the range lows at $29.8k on 24 July. This was a strong sign of bearish intent, but over the past 48 hours, the bears were unable to progress further south. In the long term, Bitcoin has a bullish price action.


Read Bitcoin’s [BTC] Price Prediction 2023-24


The latest Fidelity report appeared to bolster this bullish expectation over the next 12-18 months. Yet, in the short term, traders must exercise caution as heavy volatility can set in soon. The FOMC announcement was due on 26 July, with a hike in interest rates expected.

The depressed volume and lack of volatility spelled trouble for both longs and shorts

Bitcoin: Late short sellers could face losses as prices stabilize above $29k

Source: BTC/USDT on TradingView

Bitcoin has a bearish structure as it made a lower low on the chart upon the move below $29.8k. The RSI on the 4-hour chart showed a reading of 37.7 and has been below neutral 50 since 13 July. It was a signal that bearish momentum held sway in the short term. The OBV also faced resistance overhead as buyers remained weak.

Yet, over the past two days, Bitcoin did not advance lower on the chart. The price oscillated within the $29k-$29.3k area. It was likely that market participants were waiting for the FOMC announcement, which analysts expect to be a 25-point hike.

The stable price action after the breakout downward suggested this could be the calm before the storm. A month-long range followed by a strong breakout downward, but the bears were unable to make any headway. This suggested that a short squeeze could arrive, and prices could bounce toward the $30.5k-$30.8k region to collect liquidity before falling.

The spike in Open Interest showed late short sellers could be in jeopardy

Bitcoin: Late short sellers could face losses as prices stabilize above $29k

Source: Coinalyze

When BTC slipped below the range lows on 24 July the Open Interest rose swiftly. It climbed from $9.5 billion to $10 as prices sank toward the $29k mark. This showed breakout traders entering short positions and strong bearish sentiment.


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Since then, this bearish fervor has worn off a little. The OI was falling once again as prices stayed steady. This hinted at speculators exiting the market- and the late short sellers could get caught offside by a short squeeze.

Longs hoping for a recovery could face losses if BTC nosedived after the FOMC announcement as well.

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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