South Korean trading volumes for the bitcoin offshoot token boomed last week, spurring a price spike last week.
Traders betting against bitcoin cash (BCH) lost the highest amount in over two years amid a price spike to the $320 level last week, Coinalyze data shows.
Shorts and longs cumulatively lost over $25 million on BCH-tracked futures, which may have contributed to the sudden spike. Shorts refer to bets against any asset, while longs are bets on price rises.
As of Monday, funding rates have fallen negative across all exchanges that list BCH futures. Negative funding rates indicate that short traders are dominant and are willing to pay long traders to remain in their positions.
BCH traders are paying funding rates as much as -0.05% every 8 hours in fees to exchanges, implying short interest in the tokens is rising.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.
Related
Source: Vietnam Insider