In a surprising twist, cryptocurrency traders are leaning bearish even as Bitcoin teeters on the brink of a new all-time high. As of today, July 4, 2025, Bitcoin has been trading above $110,000 and is within striking distance of a record $112,000, yet market sentiment appears less than optimistic.
Traders Turn Bearish Amid Bullish Signals
Recent data from Coinalyze paints a curious picture: while Bitcoin climbed from $106,000 to $110,000 this week, the long/short ratio—a key barometer of retail sentiment—tumbled from 1.223 in favor of long positions to 0.858, suggesting a tilt towards shorting. This shift marks a stark contrast to the bullish sentiment that defined the 2021 market surge. Even as open interest climbed from $32 billion to $35 billion, indicating increased capital inflow into short positions, funding rates stayed positive. This suggests that some traders are still hedging their bets with long positions, perhaps expecting a rebound. For more insights on why Bitcoin struggles to break the $112,000 mark, see BTC analysts explain the hurdles.
According to cryptocurrency analyst Emma Reid, “The market is at a crossroads. Despite the positive funding rates, the bearish divergence on the RSI can’t be ignored, and traders are clearly hedging against potential downside risks.”
A Range-Bound Market
Since early May, Bitcoin has been oscillating in a tight range between $100,000 and $110,000, consistently testing these levels of support and resistance. The relative strength index (RSI), a popular momentum indicator, has been signaling bearish divergence, weakening with each test of the $110,000 mark. This pattern suggests that while the bulls are trying to push through, the bears are equally determined to maintain the status quo.
The long/short ratio is particularly telling. On June 22, as Bitcoin briefly dipped below $100,000, the ratio spiked to 1.68, indicating a swift market reaction to the downside breach, only for Bitcoin to bounce back—an indication of the range-bound nature of current trading. This mirrors the sentiment seen when Bitcoin rallied to $109.7K, yet faced skepticism from pro traders.
The Short Squeeze Potential
Here’s where it gets interesting: the growing number of short positions might just be setting the stage for a classic short squeeze. Should Bitcoin manage to breach the elusive $112,000 level, it could trigger a cascade of liquidations and stop losses, forcing shorts to cover and potentially driving prices higher in a rapid ascent.
Yet, skepticism lingers. Will the market see another bull run, or are we on the cusp of a prolonged consolidation phase? The trading community is divided. Some, like veteran trader Alex Chen, remain cautious: “This could simply be a case of traders exploiting the range. Unless we see a decisive break, it’s prudent to remain on the sidelines or play the volatility.”
Forward-Looking Implications
The coming weeks will be crucial. As Bitcoin flirts with historic highs, market dynamics could shift rapidly, especially if macroeconomic factors or regulatory news come into play. For now, traders are keeping a watchful eye on technical indicators and sentiment data, ready to adjust their positions at a moment’s notice.
As we step into the second half of 2025, one question looms large: Can Bitcoin sustain its momentum to reach new heights, or will the bears have their day? Only time will tell, but one thing is certain—volatility is the only constant in the crypto world.
Source
This article is based on: Traders Pile on Short Positions as Bitcoin Approaches All-Time High
Further Reading
Deepen your understanding with these related articles:
- $280 Million in Crypto Shorts Liquidated as Bitcoin Tops $110K
- Bitcoin analysts say this must happen for BTC price to break $112K
- Bitcoin DEX Traders Position for Downside Volatility With $85K-$106K Puts, Derive Data Show
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
