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Bitcoin’s brief publicity has been gaining favor from each retail and institutional traders during the last couple of months. For most, this place within the digital asset has paid off, given its continued decline over this time. Even then, traders haven’t eased up of their publicity to this funding car. The whole property below administration for brief bitcoin ETF are on the rise, sparking speculations of a possible brief squeeze.

Investors Increase Exposure

When the ProShares Short Bitcoin ETF first debuted earlier in 2022, it got here out with a number of assist from traders. These traders had been already used to longing bitcoin by way of the supplied ETFs however had lastly gotten the flexibility to brief the digital asset in a bear market. It was one of many largest crypto ETF launches, reaching greater than 3,000 BTC in publicity in lower than a month.

Since then, there was a considerably regular improve in publicity to this ETF. By the top of August 2022, it had touched a brand new all-time excessive of 5,335 BTC. This adopted the decline of the worth of BTC under $19,000, making a pattern of elevated publicity every time the worth dipped.

This pattern has additionally continued into the month of September, which has been a brutal month for the digital asset. The Short BTC ETF publicity had declined at first of September as traders took revenue, but it surely had begun to develop as soon as extra, nearing all-time excessive values.

ProShares’ BITI touches 5,270 BTC in publicity on September twenty third, the Third-largest to this point since launch. This improve had, as soon as once more, coincided with the drop within the value of bitcoin to the low $18,000s earlier than staging a restoration.

Bitcoin Short Squeeze Coming?

The elevated publicity to brief bitcoin ETFs might very effectively be main to a different brief squeeze. Investors had already begun taking earnings from their place, resulting in more than $5 million in outflows last week, but they continue to hold strong in shorting the digital asset.

Now, traders placing in more cash throughout native bottoms might imply that they had been buying and selling in a nasty means, however additionally it is essential to notice that the market has continued to pattern decrease with every latest dip. This has additionally had an affect on spot buying and selling as there may be much less shopping for and extra promoting happening.

BTC value recovers above $19,000 | Source: BTCUSD on TradingView.com

If the demand for brief BTC continues to rise and attain a brand new excessive, a ensuing brief squeeze might see the worth of bitcoin plunge to $17,000 as soon as extra. A slight change within the present investing pattern, which is more cash flowing into the brief BTC ETF even when the worth of bitcoin is in restoration, can simply result in this. 

Bitcoin’s value remains to be exhibiting a weak restoration, which supplies credence to the brief positions being assumed by traders. It is weakly holding on to the $19,000 stage. So additional decline might push Short BTC publicity to a brand new excessive.

Featured picture from BeInCrypto, charts from Arcane Research and TradingView.com

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