Bitcoin (BTC) has delivered on its reputation of shocking price movements – surely not for the last time – by climbing more than 25% in the past four days, more than likely ending the bear market of 2018.

The leading crypto went “parabolic” last night (that is to say, straight up), blowing through all reasonable resistance levels.

12 may bitcoin pa(source: TradingView.com)

For now, BTC is finding support just above $7,000, and has stabilized there. But, volume on the pumps has begun decreasing as of the latest pump. What’s more, strength has begun to wane on the relative strength index (RSI) between peaks, suggesting that the incredible rally may finally be topping out.

12 may bitcoin pa(source: TradingView.com)

One of the most important metrics to pay attention to right now is the ratio between long and short contracts, which data are available for the Bitfinex exchange. Shortsellers, betting that price would be contained at $6,000, have taken an absolute thrashing since May 8.

12 may bitcoin pa(source: TradingView.com)

The number of shorts had been climbing in the direction of historic highs, but we can see that the number of contracts is now dropping precipitously. Short contracts on Bitfinex number about 26,000 at time of writing, down from 33,000 days ago.

Longs, on the other hand, have been going in the opposite direction, exploding 30% in the last couple of days to more than 23,000 contracts – although this is nowhere near historic highs of nearly 40,000 contracts.

Being that the majority are still in favor of the shorts, there is probably still plenty of rocket left in the rally, if the bulls can muster the cash to push prices yet higher. This is the case because many traders are stuck in their short contracts, begging for the market to come back down to their breakeven price.

The bet that price would be contained at $6,000 was a perfectly reasonable trade to make, and many traders probably bet too heavily on this containment – they are reluctant to sell. When they are finally liquidated en masse, we could see another massive spike to the upside.

Certainly, nothing is off the table at this point, with Bitcoin’s price having already sliced through very deep resistance zones.

The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.