Cryptocurrency analysis firm Alphractal has suggested that a local peak may have formed in Bitcoin’s price, noting a significant divergence between Bitcoin’s Long/Short Ratios and several major altcoins.
Alphractal noted in his statement that when the altcoins’ Long/Short Ratio deviates significantly from Bitcoin’s, this has historically signaled a local top in Bitcoin’s price action.
“Altcoins like XRP, ONDO, LINA, KAS, and DOT are among the altcoins with the highest Long/Short Ratios, contributing to an average value of 2.48 across all altcoins,” Alphractal said. In comparison, Bitcoin’s Long/Short Ratio currently stands at 0.87, indicating a significant number of investors are short. This trend has been pushing Bitcoin’s price upwards recently.
However, Alphractal warned that such low Long/Short Ratios for Bitcoin are unlikely to continue for long, as they typically signal a shift in market sentiment. The firm noted that when the gap between Bitcoin’s Long/Short Ratio and altcoins grows particularly large, the Bitcoin price struggles to maintain its upward momentum, forming local tops over the past 240 days.
*This is not investment advice.
