Edris
Why is the derivative exchanges reserve rising and what to expect?
đ Bitcoinâs price has been crashing so rapidly that the long-term holders and even some whales are panicking as a result of their portfolios going into drawdown. This would cause these cohorts to deposit their coins into derivative exchanges and open leveraged short positions to lower their risk and hedge their portfolios against further price declines. However, this aggressive shorting would create even more selling pressure and push the price even lower. đ On the other hand, it would also create a possibility for a huge short-squeeze, if sufficient demand comes in and the price suddenly reverses to the upside. The potential short liquidations and profit taking which would usually occur at price bottoms, would cause a rapid surge in price and could even start a new bullish phase. Although, with Bitcoinâs recent heavy price action, it may still take some time and even more drop in price, before a massive short-squeeze could be expected.