In recent weeks, as the price of Bitcoin has surged, short positions on the cryptocurrency have decreased. Recent data reveals that on Bitfinex, Bitcoin short positions have reached their lowest point this year, with hedged short positions dominating.
This data suggests that those betting against Bitcoin are becoming less active, possibly due to a waning bearish sentiment in the market. This shift may indicate growing confidence among traders regarding Bitcoin's future prospects.
As positive sentiment around Bitcoin continues to rise, its correlation with major stock market indices, such as the Nasdaq, is declining. Currently, the correlation between Bitcoin and the Nasdaq index has reached its lowest point since August 2021.
This diminishing correlation means that Bitcoin is increasingly seen as a more independent and lower-risk investment, signaling a positive sentiment.
If Bitcoin's price is no longer strongly influenced by the Nasdaq, it can become a part of diversified investment portfolios. When stock markets decline, Bitcoin may not follow the same trend, helping to reduce overall investment risk.
Furthermore, the recent increase in Bitcoin's implied volatility may present opportunities to capitalize on price upswings.
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