Short positions in Bitcoin (BTC) are on the rise as stock markets turn lower amid growing concerns that central banks will continue raising interest rates to lower inflation.
More than $10 million U.S. flowed into short Bitcoin funds and positions over the past week, according to data from cryptocurrency asset manager CoinShares.
Short positions mean that investors are betting the price of Bitcoin will decline in the coming weeks and months.
At the same time, about $12 million U.S. flowed out of long Bitcoin funds and positions in recent days as investors turn bearish on cryptocurrencies with stock prices once again declining.
While the price of Bitcoin has fallen 3% over the past five trading sessions, it has been among the best performing investments so far in 2023.
Since the start of the year, Bitcoin’s price has risen 40% to $23,400 U.S. That compares with a year-to-date gain of 4% in the benchmark S&P 500 stock index.
However, Bitcoin has been struggling to break above a key resistance level at $25,000 U.S.
The shorting of Bitcoin comes as strong U.S. economic data has raised the prospects of more interest rate hikes from the U.S. Federal Reserve (Fed) and put pressure on stocks and other assets.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is up 37% year-to-date and trading at $1,640 U.S. per token.
