Bitcoin correction may be painful, but here are 9 signs the market is too bearish, and we’re close to a bottom

In our crypto note to clients last Wednesday, we highlighted that this sell-off could set Bitcoin up for a new all-time high. But we also pointed out that we thought the “market may need to get a little more bearish first.” Bitcoin has since moved about 15% lower from $50k to near $42k today. It’s hard to time short-term bottoms, but if we had to bet, here are 9 reasons we think we’re close to one:

1) Bitcoin feels like it’s falling apart but this type of correction is normal during bull markets

Bitcoin is down ~30% from its prior ATH. Compared to traditional market volatility this seems like a bear market, but during crypto bull market runs this has been par for the course. Bitcoin had several similar pullbacks during its march to 2017 highs and this is the third pullback of over 25% during this 2021 run.

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Source: Tradingview

2) Highest level of shorts on Bitfinex since November 2020 before market went parabolic

Few investors were willing to short Bitcoin during the market run up and range bound consolidation we’ve seen since February, but that’s changed with the recent sell-off. Bitfinex short interest has spiked and hasn’t been this high since Nov 2020 before we went parabolic. We realize this is only one exchange, but we think this is illust...

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