Short-selling data from the month of June suggests that traders believe that the crypto market has bottomed out. Monthly US short-selling in stocks and cryptocurrencies in the month of July fell to $20 billion- a third of the previous month’s $ 60 billion.
According to a Forbes report, selling exhaustion or crypto crashes could have convinced the short-sellers to expect a rebound and lower their positions. The crypto market has lost nearly two-thirds of its value this year, keeping investors wary of any further ructions.
Has The Market Capitulation Ended?
In a recent interview with Reuters, Sam Bankman-Fried, the CEO of FTX, revealed that he believes the worst of the crypto liquidity crunch is over. SBF pointed to the stability of the prices and analyzed that the majority of the crisis is now over. CryptoGodJohn, a major crypto trader and influencer, also highlighted SBF’s local bottom signal and the subsequent upward price movement.
Analysts from J.P. Morgan also highlighted that the ongoing crypto crisis is soon to be over, and that recovery can be expected. Pointing to the financial help received by the troubled firms from major companies like FTX, the analysts revealed that the deleveraging that affected firms like 3AC would end soon.
Bloomberg’s Senior Commodity Strategist Mike McGlone also indicated that the crypto bottom may already be in. He pointed out that the Bloomberg Galaxy Crypto Index is nearing a similar drawdown as the 2018 bottom and that the risk vs reward indicator is tilting towards responsive investors.
