Bitcoin Cash (BCH) shorts posted biggest losses in 2 years as prices surged to $320

Traders betting against bitcoin cash (BCH) lost the most amount in more than two years amid a price rally to the $320 level last week, Coinalyze data shows.

Shorts and longs cumulatively lost over $25 million on BCH-tracked futures, which may have contributed to the sudden spike. Shorts refer to bets against any asset, while longs are bets on price increases.

As of Monday, funding rates have fallen negative across all exchanges that list BCH futures. Negative funding rates indicate that short traders are dominant and are willing to pay long traders to remain in their positions.

BCH traders pay funding rates as much as -0.05% every 8 hours in fees to exchanges, suggesting that short interest in the tokens is increasing.

Liquidation refers to when an exchange forcefully closes a trader̵[ads1]7;s leveraged position due to a partial or total loss of the trader’s initial margin. It occurs when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open).

Large liquidations can signal the local top or bottom of a steep price movement, which can allow traders to position accordingly.

Last week’s move likely came amid increased BCH trading volumes on South Korean exchanges – whose traders are known for irrational exuberance – and the launch of EDX Markets, a new exchange backed by traditional financial heavyweights Fidelity Digital Assets, Charles Schwab and Citadel Securities which backs BCH along with bitcoin (BTC), ether (ETH) and litecoin (LTC).