In its latest market analysis, crypto analytics firm Alphractal spotlighted a frequently overlooked metric: leveraged position data from Bitfinex.
The firm argues that this data often holds key insights into potential market direction — especially when it comes to crowd behavior and liquidations.
According to Alphractal, there’s a counterintuitive pattern that tends to play out on Bitfinex. “When long positions increase on Bitfinex, the price usually decreases. When long positions decrease, the price usually increases,” the firm stated. This pattern is often the result of retail traders entering leveraged long positions at the wrong time, only to be liquidated, pushing prices in the opposite direction.
Long Positions Are Declining — A Bullish Signal?
Alphractal pointed out that long positions on Bitfinex are currently falling, which it interprets as a potentially bullish signal. If the downtrend in leveraged longs continues, it could clear out excess leverage and provide a healthier setup for a price rebound.
However, the firm cautioned that if long positions begin to rise again, it may indicate renewed speculative behavior, increasing the risk of another price correction due to potential liquidation pressure.
ADA, LINK Liquidations and Short Squeeze Potential
The report also highlighted recent long liquidations in altcoins such as ADA and LINK, signaling that traders misjudged the near-term direction. At present, Alphractal notes that the highest liquidation risk lies in short positions, suggesting that a short squeeze could be in play if prices begin to move upward sharply.
In conclusion, Alphractal emphasized a broader principle observed across crypto markets: major liquidations often lead to local bottoms, as overleveraged positions are flushed out and price action resets. For now, the trend in Bitfinex positioning offers a cautiously optimistic outlook — but only if current patterns hold.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/these-2-altcoins-could-be-nearing-a-local-bottom/