The pessimistic sentiment around bitcoin prices saw the number of shorts hit a six-week high on Thursday.
The data indicates that, despite being so deep into the bear market, sellers appear to be showing no signs of exhaustion. As a result, the cryptocurrency may revisit the recent low of $3,474 as hinted in the technical charts.
The bearish sentiment, however, could soon reach extremes as the short positions are down just 7 percent from the record high of 40,289 that was reached on on Sept. 19. Moreover, the extreme bearish positioning is widely considered a sign that the sell-off is overdone and often presages a trend reversal.
Therefore, the prospects of sudden bullish reversal, similar to the one seen on April 12, would improve substantially once the short positions reach record highs.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Market app image via myBTCcoin; Price charts by Trading View
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