Bitcoin Traders Switch From Selling Rallies to Buying Dips

Traders' bias has shifted from 'sell the rally' to 'buy the dip' in Bitcoin, according to Blockchain.com's Global Head of OTC Trading Mark Sishka. This shift is particularly evident following the cryptocurrency's recent rally towards $80,000.

Sishka attributes this change in sentiment to a major short squeeze that propelled Bitcoin upwards. However, he cautions that the magnitude of the move has made traders reconsider their positions, leading them to buy dips instead of selling rallies.

According to Sishka, Bitcoin looks 'toppy' near current levels, and rebuilt long leverage could trigger a short-term flush towards $70,000 to $72,000. A pullback to this zone could establish a higher low before another attempt at $82,000 to $85,000.

The options market is also reflecting the shift in sentiment. Long-dated skew, which had favored puts for an extended period, has moved towards flat or slight call premium following Bitcoin's rally. This suggests that longer-term traders are becoming less focused on downside protection and more willing to position for further upside.