• Press Releases
    • Submit a press release
    • Read All
  • Advertise
  • Contact us
Crypto.com Logo Crypto.com Logo
Bitcoinist.com
No Result
View All Result
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN
Bitcoinist.com
No Result
View All Result
bitcoin spx s&P 500 big net short
Nexo

Stock Market Net Shorts Reaching Decade Highs Could Fuel a Bitcoin Breakout

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin
0

After a record-breaking recovery rally, traders aren’t convinced any of the recent gains in the S&P 500 are sustainable and have amassed the largest net short futures position over the past decade. Due to the ongoing correlation between Bitcoin and the stock market, a massive short squeeze in the S&P 500 index could help Bitcoin finally break out from resistance at $10,000.

2020 is a Rollercoaster Year For the Financial Markets

At the start of 2020, Bitcoin went on a rally alongside other big-name cryptocurrencies like Ethereum, Chainlink, and Tezos. The bullish momentum to kick off the new year helped Bitcoin reclaim resistance at $10,000.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

Meanwhile, most major global stock market indices set records for their highest prices ever traded.

Just as the milestones were set in the stock and crypto market, fears over a then-unknown pandemic just beginning caused investors to panic, cashing out as many assets as they could in a mad dash of liquidation.

RELATED READING | DEUTSCHE BANK WARNS OF DISASTER WORSE THAN PANDEMIC THAT COULD COMPLETELY KILL BITCOIN

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

The stock market tumbled, going from all-time highs to a record-setting worst quarterly close in history. Bitcoin and the rest of the high-risk crypto market came crashing down alongside the S&P 500, Dow, and other major US indices.

The two assets also recovered alongside one another, keeping the sudden and unusual correlation going. Now, as short positions stack up to the largest net short position across S&P 500 futures over the last nine years, it could end up helping Bitcoin break out from its bear market once and for all.

bitcoin spx s&P 500 big net short

Epic Stock Market Short Squeeze Could Help Bitcoin Break Through $10,000

As most crypto traders are likely well aware of at this point, when short positions are overwhelmingly leaning towards one side or the other, a contrarian move is likely, as it causes “max pain” across the market.

Net short positions in S&P 500 futures have reached the highest level over the last nine years.

With net short positions so heavily outweighing long positions in S&P 500 futures, a powerful short squeeze is possible.

A short squeeze is a strong move up, purposely designed to force short positions to cover, further driving up the price of an asset. Oftentimes, when assets are stuck below resistance, its the cascading effect of shorts covering and stops being hit that helps propel price through resistance.

S&P 500 short squeezing from here could help it trade closer to or perhaps above its previous all-time high. And if the correlation between the S&P 500 continues, a short squeeze in the stock market could help Bitcoin price finally break through $10,000 once and for all.

bitcoin sp500 spx stock market short

S&P 500 Monthly | Source: TradingView

Such a scenario, however, is predicated on a short squeeze that may or may not happen. The last instances of short positions reaching such highs resulted in year-long consolidation phases before the next move higher.

RELATED READING | MONEY MANAGER RECOMMENDS ZERO EXPOSURE TO EQUITIES, WILL CAPITAL FLOW INTO BITCOIN?

Short positions stayed at similar levels throughout the entire duration of each 12-month long period in SPX futures. Should history repeat, the downside in the stock market is only just beginning, and instead of helping Bitcoin along, the S&P 500 correlation could hinder the cryptocurrency’s bull market a while longer.

Featured image from Shutterstock.

Charts from TradingView.
ShareTweetShareShare

Sign Up for Our Newsletter!

For updates and exclusive offers enter your email.

I consent to my submitted data being collected and stored.
Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

Related Posts

Bitcoin

By The Numbers: Bitcoin’s Most Volatile Day Of 2022 Compared

5 hours ago
Bitcoin

Bitcoin Spot Volume Soars, 7-Day Average Tops $10B

9 hours ago
Bitcoin

Crypto Market Madness Leads To Surge In Bitcoin On-Chain Activity

11 hours ago
Sam Bankman-Fried: Bitcoin Isn’t A Viable Payment Network

Sam Bankman-Fried: Bitcoin Isn’t A Viable Payment Network

15 hours ago
US Justice

US Justice Department Executes First Criminal Crypto Charge

15 hours ago
Texas, a huge boot in front of a store

Bitcoin & Energy Merge In Texas: 3 Giant Companies Announce New Mining Facility

1 day ago

Bitcoin news portal providing breaking news, guides, price analysis about decentralized digital money & blockchain technology.

Bitcoin

  • News
  • Price
  • Businesses
  • Acceptance
  • Technology
  • Investment
  • Regulation
  • Reviews

Altcoins

  • News
  • Price
  • Ethereum
  • Ripple
  • Litecoin
  • EOS
  • NAGA

Categories

  • Blockchain
  • Security
  • FinTech
  • Technology
  • Trending
  • Breaking News
  • Press Releases
  • How to

Pages

  • Contact us
  • Editorial Policy
  • Advertise
  • Crypto Prices from Nomics
© 2022 Bitcoinist.com. All Rights Reserved.
  • Bitcoin
    • News
    • Price
    • Businesses
    • Acceptance
    • Technology
    • Investment
    • Regulation
    • Reviews
    • All Bitcoin News
  • Altcoins
    • News
    • Price
    • Ethereum
    • Ripple
    • Litecoin
    • EOS
    • NAGA
    • All Altcoin News
  • Tech
    • Blockchain
    • Security
    • FinTech
  • Industry
    • Press releases
  • Price
    • Bitcoin Price
    • Ethereum Price
    • Litecoin Price
    • Binance Coin Price
    • Monero Price
    • MimbleWimbleCoin Price
  • How to
    • Buy gift cards/mobile Top Ups with Cryptos
    • What Is Bitcoin?
    • Best Bitcoin Wallet
    • Bitcoin vs Ethereum
    • Why Use Blockchain Technology?
    • Bitcoin Cash ABC vs. Bitcoin Cash SV
    • How to Buy Cryptocurrency
    • Bitcoin Mining
    • Best Bitcoin Brokers
    • Best Bitcoin Forex Brokers
    • How To Earn Btcoin
    • What is Facebook Libra?
    • Ripple and XRP: The Complete Guide
  • Play Games
  • BET&WIN

© 2021 Bitcoinist. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.