Famous Trader Still Bearish Despite $200M in Liquidations

Renowned Crypto Trader Remains Bearish Despite $200 Million in Short Positions Liquidated

The crypto Godfather’s disbelief in the recent crypto rally, exemplified by the $200 million-plus liquidations of short positions in the last 24 hours, highlights the importance of watching price action when investing in a digital asset rather than relying solely on the efforts of an influencer.

Il Capo Of Crypto, who gained traders’ trust by accurately predicting several market bottoms, recently disappeared from crypto Twitter as the market invalidated his thesis that the recent bitcoin rally was a fool’s rally.

Is Il Capo in Disbelief Despite $200M in Short Position Liquidations?

Recently, the influencer resurfaced to confirm that he was still bearish, despite crypto’s recent rally and the liquidation of $230 million worth of short positions. 

Shorting Bitcoin involves selling hoping its price will drop, then buying it at a lower price to earn a profit. Traders can amplify their profits by borrowing money from a lender to buy Bitcoin, which they immediately sell. They hope they will profit more by buying back Bitcoin at a lower price. However, they can get liquidated if the money they pledge as collateral falls below the lender’s minimum threshold.


More liquidated short positions suggest that the crypto prices are defying investor expectations by rising instead of falling.

However, Il Capo Of Crypto’s silence suggests that he could be in disbelief. Disbelief is a market stage following a bear market during which investors believe any rally will fizzle out. 

Last year, crypto hedge fund Three Arrows Capital collapsed after one of its founders’ “supercycle thesis,” which theorized that increasing adoption would drive prices higher without the risk of a near-term bearish pivot, proved short-lived at best after the collapse of notable crypto projects in mid-2022 sent crypto prices reeling. 

In short, investors were happy when the thesis worked but left holding the bag when it didn’t.

Observing Markets Can Help Those Paralyzed by Trader Disbelief

Disbelief on the part of a crypto influencer can blind adherents to price action that may present a viable investment opportunity.

Recent negative inflation data coming out from the U.S. caused Bitcoin to rally even as traditional stock markets tanked. This price action suggests that Bitcoin is breaking its correlation with stock markets. Which makes it attractive as a safe haven asset. It is currently trading at about $24,500, close to a six-month high, and up 46% in 2023.

Understanding the regulatory and legal climate in which some cryptos operate could also help investors decide whether to invest or exit their positions.

Cryptos rallied more broadly on Feb. 16, 2023, after news broke that the world’s largest exchange, Binance, could pay a fine for potential money laundering violations instead of stiffer penalties.

A recent crackdown by the U.S. Securities and Exchange Commission on crypto exchange Kraken’s staking service could have prompted investors to move their ETH to liquid staking protocols. Lido, which also offers staking for MATIC and SOL, has about $9 billion in Total Value Locked, according to DeFiLlama.

The New York Financial Services Department recently ordered the issuer of the BUSD stablecoin Paxos to stop minting the stablecoin. This caused the coin’s price to lose its $1 value briefly. Alert investors could have pulled their funds out of BUSD and move them to another stablecoin with a lower chance of regulatory crackdown.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.


BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.

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