Short selling data for June shows that traders believe the cryptocurrency market has bottomed out. Short selling means selling an asset in anticipation of buying it again at a lower price. Monthly short sales in stocks and cryptocurrencies fell to $20 billion in July. The previous month, this figure was 60 billion dollars. According to the Forbes report, heavy selling or resulting collapses may have convinced short sellers to wait for a rebound and lower their positions. The crypto market has lost nearly two-thirds of its value this year. Therefore, investors remain wary of further volatility.

In a recent interview with Reuters, FTX CEO Sam Bankman-Fried explained that the worst of the liquidity crisis in the cryptocurrency market is over. The manager pointed to the stability in prices and claimed that most of the crisis is now over. Prominent cryptocurrency trader and influencer CryptoGodJohn pointed to the bottom signal and then highlighted the bullish price action.

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J.P. Morgan analysts stressed that the ongoing cryptocurrency crisis will end soon and a recovery can be expected. Analysts pointed to the financial assistance that troubled firms received from large companies such as FTX, revealing that the debt crisis affecting firms such as 3AC will soon end. Bloomberg's Senior Commodity Strategist Mike McGlone also stated that the bottom may have already arrived in Bitcoin. The analyst said that the Bloomberg Galaxy Crypto Index is approaching a similar drop to the 2018 low and the market may start to gain momentum.

Signs of recovery in the cryptocurrency market also reflect this optimism. BTC price has risen over 12% in the last 7 days while ETH has increased by 17% over the same period. Solama increased by 18%, while AVAX increased by 23%. A report by Institutional Investors highlighted that crypto stock Block has surpassed $1 billion in short selling, with a 34% gain. Similarly, Coinbase Global made 47% gains worth $847 million to short sellers. Tether CTO Paolo Ardoino also claimed that hedge funds are destabilizing USDT, after reports revealed a massive spike in Tether's short selling.