Bitcoin’s recent surge has stalled after reaching a new all-time high last week. The decline is attributed to an exhaustion of bullish momentum, with the overall market experiencing downward pressure in its final week of May. However, a recent on-chain observation suggests that decreased long positions on Bitfinex could be a positive sign for Bitcoin’s short-term movement.
Crypto analytics firm Alphractal recently analyzed the relationship between leveraged long positions on Bitfinex and Bitcoin’s price direction. According to Alphractal, the ratio of buys to sells on Bitfinex has an inverse correlation with Bitcoin’s price trajectory. When there are more long positions, the likelihood of a price drop increases, but when long positions decline, it could be bullish for Bitcoin.
The firm attributes this pattern to traders being wrong about market trends, leading to liquidations and forced position closures that drive prices in the opposite direction. The Bitfinex Long Position metric shows a decline, indicating that if this trend persists, Bitcoin may resume its upward run. Conversely, an increase above its current level could signal a severe pullback.
As of press time, Bitcoin trades around $104,100, having lost over 2% in the past 24 hours and nearly 4% in the past week. The decline is reflected on both the daily and weekly timeframes.
Source: https://bitcoinist.com/bitcoin-price-regain-upward-momentum-bitfinex-longs