Bitcoin Shorts Rise as Market Signals Turn Cautious After Record Highs

Bitcoin has surged past $111,000, hitting new all-time highs, but trader sentiment is shifting towards fear as over 53% of positions are now short. Prominent investor James Wynn has reversed his bullish approach following significant losses and opened substantial short positions. Market analysts suggest that this trend reflects broader exhaustion in the bull cycle, with potential corrections expected post-October 2025.

Bitcoin has recently surged past the $111,000 mark, breaking records once again. Yet, a closer look at the trading data from major exchanges reveals a significant trend: traders are pulling back from this bullish momentum and are starting to place short positions. As per CoinGlass statistics, a concerning 53% of Bitcoin positions are currently short, indicating that a majority expect prices to fall, while only 47.43% remain optimistic with long positions.

This bearish sentiment is reflected across the board, particularly on Binance, where short trades represent 54.05% of the open interest, as opposed to 45.95% for longs. Despite Bitcoin hitting new peaks, the inclination towards short positions indicates rising caution among traders. A notable shift in opinion was seen when well-known crypto whale James Wynn reversed his bullish outlook after suffering significant losses.

Previously maintaining a hefty 40x leveraged long position valued at around $1.25 billion, Wynn exited the trade following a drop in Bitcoin’s price from $109,000 to approximately $107,107. His hasty departure resulted in a staggering loss of $13.39 million, with the liquidation occurring within just an hour on May 25. Subsequently, he opened a new short position of 3,523 BTC, valued at about $377 million, initiating his entry at $107,128—with a liquidation point set near $118,380.

Analysts are interpreting Wynn’s move as indicative of wider market exhaustion amidst the current bullish cycle. Blockchain analytics firm Alhpractal has reported that short-term holders (STHs) are starting to distribute their coins. Historically, such behaviour typically signals that Bitcoin could be nearing a local top, as a decline in STH supply often precedes price drops.

According to Alhpractal, the Short-Term Holder Realized Price is at $94,500, marking a critical support level before losses are likely to occur. Meanwhile, long-term holders (LTHs) remain largely unfazed, with their realized price climbing to $33,000, illustrating a stark difference in market behaviour. The firm cautioned that while Bitcoin has reached record highs before under similar conditions in 2021, the current cycle may soon face exhaustion.

Moreover, there are several macro indicators and historical halving trends that point towards a potential correction anticipated following October 2025. Traders and analysts alike will be watching carefully, as market sentiments shift and the future of Bitcoin remains uncertain.