Short selling pressure returns to the market with a trader eyeing a retest of $31,000 as a result of support weakness.
Bitcoin (BTC) fell below $33,000 support on July 8 as a trusted trading range risked getting invalidated.
Trader: $31,000 retest next for BTC
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD dipping into the $32,000 range during trading on Thursday.
The move followed an overnight retracement from around $35,000, with Bitcoin failing to crack crucial resistance.
With that, Bitcoin risks invalidating a bullish scenario which involves it entering the next stage of a Wyckoff distribution with potential to exit to the upside — around $39,000.
“Losing $33K range and I'm looking at $31-31.4K,” popular trader Michaël van de Poppe warned just before the dip began.
At the time of writing, volatility still meant that a recovery back within the range was possible, with BTC/USD circling $32,500 after local lows of $32,490 on Bitstamp.
Bitfinex shorts spike 160% in hours
The latest price action came hours after fresh selling pressure thanks in part to an unknown whale trying to short it with over 5,000 BTC.
As noted by journalist Colin Wu, July 8 had witnessed short positions build up on major exchange Bitfinex.
Related: Data fails to conclude that Bitfinex shorts are depressing Bitcoin price
A mystery Bitfinex user began entering short positions with a stack of at least 5,219 BTC, worth $173 million at $33,000 levels.
“According to datamish data, from 13:00 Beijing time, a account (or institution) has borrow bitcoin to short on Bitfinex,” Wu reported.
“As of 15:03, he borrowed a total of 5219 BTC, and this number is still growing. Most short positions are non-hedged.”
At the time of writing, total Bitfinex short positions had increased 160% in around two hours.
Bitfinex shorts remained roughly balanced with longs, Bybt figures nonetheless showed.
The whale shorting is not new. As Cointelegraph reported, June likewise saw fluctuations in trader behavior, with Wu eyeing 15,000 BTC worth of bets flooding in on a fresh price dip on June 25. The next day, BTC/USD saw a fresh retest of $30,000 support.
