Volume Spike for The Bitcoin Short ETF - Does It Mean Anything?
Overall, since the end of 2021, I've seen Bitcoin is more of a net-negative when it comes to investing, for a variety of reasons. I've outlined all of this pretty clearly in my posts to this account since then. I correctly anticipated the drop all the way down below 20k back in 2022, though I did not really have any intention of buying back in or trying to time a bottom. Ultimately, Bitcoin bottomed at 15.5k.
Once the ETF news came out, it had the appearance of saving the market. The news carried Bitcoin to new heights....though active addresses for Bitcoin holders continues to stagnate or even trend down. The kind of behavior seen here has occurred during major tops in the past: studio.glassnode.com/metrics?a=BTC&category=Addresses&m=addresses.ActiveCount&s=1406311200&u=1718928000&zoom=
In any case, my preference is ideally to short this market, since the bearish periods can last a substantial amount of time. And let's face it, I think the lower the prices, the better things will be. My only current accessible way to short Bitcoin is through BITI, which is a blessing in disguise since it's just a -1x position. No leverage.
By the nature of the crypto market, there is also a higher probability of things going to zero (or close to it) than traditional markets. While it's not extremely probable, based on my theories of this market and extensive observation, I think there's a chance a Bitcoin short will truly print. Now, this does not make it a wise choice to throw all my money in it. That would be silly. As we know, Bitcoin can continue onwards to a new all-time high if the market decides it should.
Trump's clear inauthentic endorsement of crypto does nothing but further solidify my stance on this crazy market.
What's interesting about BITI is the volume - it appears as though a lot more buyers began stepping in as Bitcoin approached ATH. I began entering at around
42K and added until it approached ATH. I then closed at a loss near 
67K in case it broke out higher. As I waited for the structure to develop, prices stalled and sellers started to dominate. I re-entered at that 67K level and added around 30% to the position near 71k. I circled the area where I've added. I've also drawn a trendline to determine a possible upside breakout moment and some horizontal levels.
I'm making a somewhat wild speculation here, but I have a hunch a small but meaningful amount of smart money is shorting Bitcoin rather than longing it. Weekly sell volume for IBIT (the Blackrock ETF) is looking pretty high and consistent.
It would be "easy" money, since another crypto market collapse wouldn't really do much to impact broader society. It seems a little more ethical to short Bitcoin than to short the housing market, for instance.
Looking realistically at the data, the daily volume for the iShares Bitcoin trust far outstrips that for BITI. The short ETF only has about -$83 Million in assets on the line, and comparatively it's much lower in volume. IBIT owns $18 Billion. Clearly, the long ETF is more popular. All this data comes from the Proshares and iShares websites, respectively.
This post is more of an observation - volume really stepped in for the short ETF at recent high prices, showing growing short interest. Whether this means anything, I guess we'll only know in hindsight.
I'll probably close my short at a loss if we get an impulse back above 71k or so. Now that I've posted my short position, price can go back up now. That's how this works, right?
As always, this is not meant as financial advice, but for pure speculation. That's all!
-Victor Cobra
Once the ETF news came out, it had the appearance of saving the market. The news carried Bitcoin to new heights....though active addresses for Bitcoin holders continues to stagnate or even trend down. The kind of behavior seen here has occurred during major tops in the past: studio.glassnode.com/metrics?a=BTC&category=Addresses&m=addresses.ActiveCount&s=1406311200&u=1718928000&zoom=
In any case, my preference is ideally to short this market, since the bearish periods can last a substantial amount of time. And let's face it, I think the lower the prices, the better things will be. My only current accessible way to short Bitcoin is through BITI, which is a blessing in disguise since it's just a -1x position. No leverage.
By the nature of the crypto market, there is also a higher probability of things going to zero (or close to it) than traditional markets. While it's not extremely probable, based on my theories of this market and extensive observation, I think there's a chance a Bitcoin short will truly print. Now, this does not make it a wise choice to throw all my money in it. That would be silly. As we know, Bitcoin can continue onwards to a new all-time high if the market decides it should.
Trump's clear inauthentic endorsement of crypto does nothing but further solidify my stance on this crazy market.
What's interesting about BITI is the volume - it appears as though a lot more buyers began stepping in as Bitcoin approached ATH. I began entering at around
42K and added until it approached ATH. I then closed at a loss near 67K in case it broke out higher. As I waited for the structure to develop, prices stalled and sellers started to dominate. I re-entered at that 67K level and added around 30% to the position near 71k. I circled the area where I've added. I've also drawn a trendline to determine a possible upside breakout moment and some horizontal levels. I'm making a somewhat wild speculation here, but I have a hunch a small but meaningful amount of smart money is shorting Bitcoin rather than longing it. Weekly sell volume for IBIT (the Blackrock ETF) is looking pretty high and consistent.
It would be "easy" money, since another crypto market collapse wouldn't really do much to impact broader society. It seems a little more ethical to short Bitcoin than to short the housing market, for instance.
Looking realistically at the data, the daily volume for the iShares Bitcoin trust far outstrips that for BITI. The short ETF only has about -$83 Million in assets on the line, and comparatively it's much lower in volume. IBIT owns $18 Billion. Clearly, the long ETF is more popular. All this data comes from the Proshares and iShares websites, respectively.
This post is more of an observation - volume really stepped in for the short ETF at recent high prices, showing growing short interest. Whether this means anything, I guess we'll only know in hindsight.
I'll probably close my short at a loss if we get an impulse back above 71k or so. Now that I've posted my short position, price can go back up now. That's how this works, right?
As always, this is not meant as financial advice, but for pure speculation. That's all!
-Victor Cobra
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