Bitcoin Cash (BCH) Shorts Lose Big as Price Spikes

Data from Coinalyze reveals that traders betting against Bitcoin Cash (BCH) lost the highest amount in over two years during the price spike to $320 last week.

Shorts and longs collectively lost more than $25 million on BCH-tracked futures, which may have contributed to the unexpected increase.

Shorts are wagers against any asset, whereas longs are wagers on price appreciation.

Monday marked the beginning of negative funding rates across all exchanges that list BCH futures.

Negative funding rates suggest that short traders are in the majority and are willing to pay long traders to maintain their positions.

BCH traders pay up to -0.05% per 8 hours in exchange fees, indicating a rise in short interest in the tokens.

When an exchange closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin, this is called liquidation.

It occurs when a trader cannot meet the margin requirements for a leveraged position (does not have sufficient funds to maintain the open position).

Large liquidations can indicate the local top or bottom of a sharp price move, allowing traders to adjust their positions accordingly.

Increased BCH trading volumes on South Korean exchanges, whose traders are known for irrational exuberance, and the launch of EDX Markets, a new exchange backed by traditional finance heavyweights Fidelity Digital Assets, Charles Schwab, and Citadel Securities that supports BCH in addition to bitcoin (BTC), ether (ETH), and litecoin (LTC), likely prompted last week’s moves.