Bitcoin tanked hard on Sunday, but it likely wasn't due to short sellers leaning on it.

At least not short sellers from Bitfinex.

Pulling the chart of short positions on Bitfinex we can see that there was no significant increase in their positions over the weekend.

In fact, short positions are still pretty much sitting at their lowest levels in months:

(Source: https://www.ccn.com/bitcoin-price-hit-key-6000-level-end-bear-market)

Interesting, and very surprising...

What does that mean?

For my money, I would have assumed that with prices having trouble busting through the $4,200 resistance levels, short sellers had piled back in and helped drive prices right back down.

However, according to the chart above, that wasn't really the case.

It looks like it mostly was long traders that were feeling bitcoin wasn't going to keep going up, so they started locking in profits.

As they sold, stop losses of other long traders likely got hit.

Resulting in a stop loss crescendo helping crash prices in a very short time.

Where do we go from here?

That is a tough call, but unless that $4,200 breaks in relatively short order the trend is going to favor the bears.

A slow grind back towards the lows is the most likely price action until/unless that $4,200 area breaks.

However, even if we retest the lows and break them, I don't see much downside below $3k and I see significant upside from our current price if we look out 2 years from now.

For that reason, I like buying at any price around the current levels.

Stay informed my friends.

-Doc