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Market Watch June 17: Short sellers capitalize on crypto market’s downtrend.

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After a brief rally yesterday, Bitcoin has once again slipped to the lows of the $20,000 mark to the delight of short-sellers. On Monday, short-sellers bet more than $631 million on the continued descent of top-six crypto stocks. This accounted for 39% of their collective trade volume for the day. Analysts say short-sellers have been waiting for the opening of equity markets to capitalize on the chaos.

Crypto firms are bracing for a further dip. MicroStrategy’s shares dropped down to 25% as it saw 77% more short-selling than usual at the beginning of the week. Signature Bank recorded an even bigger short surge. Short sellers placed about $53 million in bets against the New York-based financial institute. This was 82% above its yearly average. Signature Bank put off 20%, despite it having “virtually zero credit risk”. Signature Bank’s digital asset balance sheet is entirely based on deposits. Another crypto firm, Rival Silvergate saw 14% more shorts (about $24 million) than average. As of March 31, it oversaw about $15.8 billion in assets under management (AUM). Rival Silvergate spent $182 million in February to acquire assets and technology which was intended to power Meta’s failed stablecoin offering Diem.

Oisin Maher, co-founder of quantX, says pure Bitcoin plays have slightly declined in short interest, but broader crypto plays have jumped this month. An example is Voyager Digital’s US-listed equity. It spiked about 600% in June, and Galaxy Digital has been steadily growing as well. More bets, as per FINRA data, were on crypto’s demise last month. It shows that more than $11 billion worth of shorts were opened against crypto firms like Coinbase, Signature, MicroStrategy, Marathon, Silvergate, and Riot.

At the time of writing this article, Bitcoin was trading at $20,618. It has been down by 8.23% in the last 24 hours – losing all the gains it had made yesterday. Ethereum is close to touching the $1,000 mark. It lost 10.63% of its value and is changing hands at $1,091.

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