SOL and BTC Longs and Shorts 
2024-10-10

Clear inverse relationship between the longs and shorts on SOL. 

White (longs)
Orange (shorts) 

Right now the longs have reached the same level as when SOL hit its high of 200 back in march this year. Longs got dumped on recently on this small sell off but interest remains at elevated levels. 

Shorts coming off their lows and seem to bottom when SOL price peaks.

Longs build up pushing price to local highs then there leaves no one left to buy so price goes after the liquidity (shorts). 

Opposite happens with shorts buildup. Price sells off some, shorts pile on pushing price lower until it reaches the local bottom then price reverses once all the longs get liquidated. Then price goes after shorts liquidity. 

What then becomes the difference maker is how much spot volume comes in. At the bottom I have the aggregated volume of multiple exchanges showing the spot volume (light) compared to the perp volume (dark). Right now spot volume is pretty low; however, volume is low in general. 

My takeaways: 
SOL either needs to liquidate these longs while building up shorts. This would put shorts offside setting up for a nice reversal pump into the EOY taking out all the shorts creating a nice squeeze. 

Or perhaps spot buying picks up eventually and the longs interest slowly rises surpassing prev long interest causing the breakout. 

  

Similar analysis here on BTC but the short interest is pretty significant. Could be those who are arbitraging the perp funding rate by shorting instead of directional shorts but who knows exactly why. 

If BTC begins to break out with strong spot buying soon after election uncertainty and EOY capital flows then all this short interest could get squeezed setting up for a perfect pump higher breaking out of this wretched range. 

Time will tell. I think election uncertainty has market on edge as well as war/ recession fud. 