Bitcoin bearish leverage on Bitfinex has fallen to its lowest level in years, with short positions falling below $100,000 in late November 2025. The move reflects a near-complete unwinding of bearish bets on one of the market's most influential trading platforms. Analysts note that Bitfinex often serves as a key indicator of institutional sentiment, making this short market collapse difficult to ignore. This rapid change suggests that confidence is returning to the market after weeks of volatility.
Smart money rotation for long positions
Market observers have highlighted that Bitfinex's low short interest has historically been consistent with aggressive repositioning by institutional investors. This month's decline in bearish exposure reflects an earlier phase in which Pro Desk moved into long trades ahead of Bitcoin's significant rally. Data from CryptoQuant and Datamish shows similar short-term stock price declines in 2019, 2020, and 2023, followed by 10-20 percent gains within weeks. This pattern reinforces the narrative that deep-pocketed traders are changing positions early and preparing for a possible continuation of Bitcoin's uptrend.
Bullish momentum increases as downside pressure declines
With short positions almost eliminated, downward pressure on the Bitcoin price will be significantly reduced. Short sellers often act as a brake on sudden rallies, and once the short seller's position is extinguished, the market becomes more responsive to bullish triggers. This change is consistent with an improvement in macro sentiment following dovish signals from the Fed. Analysts say the combination of light short-term exposure, rising spot demand and healthy liquidity conditions sets the stage for stronger upward momentum. Traders currently believe the market is structurally biased toward long positions unless unforeseen macro risks materialize.
Past patterns strengthen upside expectations
The latest data confirms the long-standing correlation between Bitfinex short squeeze and short-term Bitcoin performance. In almost every previous instance where short interest fell to comparable levels, Bitcoin experienced accelerated price movements within a few days. The current price trend reflects this historical rhythm, with Bitcoin holding steady above key support levels while open interest is decisively moving into long-term trading. The absence of short-term build-up removes a major source of volatility and shifts market dynamics in favor of buyers. Many analysts are now focusing on a potential breakout zone as Bitcoin approaches the resistance level that formed at the beginning of the month.
Broader market reaction and outlook
Traders on the X and Telegram channels view this latest change as one of the clearest bullish signals this quarter. The market depth chart shows stronger bidding, reduced liquidation risk, and a healthier overall situation for derivatives. If purchasing volumes increase along with lower volatility in funding rates, Bitcoin could be in a position to retest recent highs. But analysts warn that macroeconomic data releases remain a wild card and any negative shock could temporarily slow momentum. For now, the overwhelming narrative is that smart money has decisively gone long, reshaping expectations for Bitcoin's near-term trends.
