Mid-May has been a minefield for cryptocurrency short traders as many digital assets enjoyed rallies not seen in months.
In the 24 hours between the morning of May 13 and the morning of May 14, as much as $20.4 million worth of Bitcoin (BTC) shorts were liquidated, per data retrieved from Coinalyze on May 14.
Of these, perpetuals accounted for almost the entire amount, while only approximately $39.9k were marked as futures liquidations.
The erasure of bearish bets coincided with a shallow correction in the cryptocurrency market. After climbing above $105,000 on May 12, Bitcoin corrected below $102,000 on May 13, only to soon regain upward momentum.
Overall, mid-May volatility resulted in BTC being 7.39% up in the weekly chart with its press time price of $104.136.
Crypto market volatility liquidates $17 million in bullish bets
Elsewhere, the volatility hasn’t been kind to bullish bets, though to a lesser extent than toward short sellers. Notably, the last 24 hours saw liquidations totalling $37.8 million.
Long perpetuals and futures accounted for $17.4 million of the total, indicating a 46% to 54% balance between bullish and bearish ill-fated bets.
Is it better to go long or short on BTC in May?
Looking ahead, technicals show a slight bias toward short positions. Bitcoin’s 14-day relative strength index (RSI) has climbed to 71.19, thanks to the latest rally, positioning the cryptocurrency as overbought.
Selling pressure, however, is likely to be prevalent only in the shorter timeframes. BTC is well above its nearest support at $102,233 and almost guaranteed to evade a deeper plunge if it stays above the psychologically important threshold of $100,000.
The overall digital assets market sentiment reinforces the likelihood of Bitcoin staying above the critical level. The popular ‘Fear & Greed Index’—an index that measures investor confidence that a bull or bear cycle will persist—stands at 74, firmly in the ‘Greed’ zone, per the statistics Finbold retrieved from CoinMarketCap on May 14.
On the flip side, the cryptocurrency is close to its nearest resistance at $105,584, and the closer it gets to it without a breakout, the more likely a short-term short position will prove a sound investment.
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