Despite yesterday’s 8% crash in the price of Bitcoin (BTC) driving many BTC bulls from the markets, altcoin longs have only seen slight declines, with Ether (ETH) longs defying the trend with a slight rally test of recent all-time highs on Bitfinex.
However, altcoin bears are quickly emerging from the woods, with shorts against many top altcoins piling up quickly amid Bitcoin’s recent drop.
With many altcoin bulls holding on despite the increase in shorts, numerous leading crypto assets could see a surge in liquidations regardless of what direction the markets ultimately take.
Bitcoin longs retrace heavily
The BTC shake-out saw long positions on Bitfinex plummet by over 10%, dropping from 28,800 to roughly less than 26,000. BTC/USD short positions also saw an increase of nearly 16%.
BTC/USD longs on Bitfinex, 4hr: Tradingview
The crash also drove wholesale liquidations across crypto derivatives exchanges, with more than $71 million in margin calls on BitMEX and $66 million on Binance Futures taking place in the last 24 hours — the third-largest daily liquidations of the past month according to Cryptometer.
Ether longs bulls hold steady
While altcoins did not see heavy liquidations across futures platforms, a sharp spike in short positions coupled with stubborn bulls may create the perfect storm for an aggressive round of margin calls.
While many Bitcoin bulls quickly became bearish, ETH longs saw a slight increase of 2.5% — currently testing recent record highs of 1.77 million on Bitfinex.
The persistent buying activity suggests that some market participants are predicting that Ether can continue to make gains over the dollar despite bearish signals in the Bitcoin markets.
ETH/USD longs on Bitfinex, 4hr: Tradingview
Altcoin shorts spike suddenly
However, the Bitcoin crash also drove an aggressive increase in ETH/USD short positions, which spiked by more than 18% in less than 60 minutes.
ETH/USD shorts on Bitfinex, 1hr: Tradingview
Similar trends can be observed across other leading altcoin markets, with Litecoin (LTC) longs dropping just 2.5% as shorts increased by over 30%, and XRP bulls retreating by only 3.5% as shorts flew by 15% over a few hours.
