Institutions Keep Increasing Bets Against the Market, Abraxas Capital Adds More Shorts on Hyperl*q**d as BTC and ETH Remain Trapped Under Resistance

While many retail traders wait for clear signs that the crypto market is truly reversing upward, some institutional players are doing the opposite. Abraxas Capital, a London-based asset manager, has again increased its short positions on Hyperl*q**d, right as Bitcoin and Ethereum are still struggling to break through the resistance levels that have been holding both back.

Abraxas Again Adds Short Ammunition

Latest on-chain data shows Abraxas has just deposited additional funds into Hyperl*q**d to expand its short exposure, especially in ETH and BTC. This move continues a pattern that has been in place since the middle of last year, when Abraxas became widely known as one of the largest short position holders for BTC and ETH on that platform.

Notably, Abraxas is not alone this time. New data reveals that some of their ETH short positions are now partially linked to Fasanara Capital, another institutional asset manager that manages assets worth about $5.7 billion. The combined ETH short positions of these two institutions are reported to total $108 million, with Fasanara accounting for about $67 million and the remainder held by Abraxas. Both positions are currently in a paper loss, given that ETH is trading around $1,900—well above the level when part of these short positions was first opened.

Not Just a Downside Bet—There’s a Nuance Often Overlooked

It’s important to understand before rushing to conclude that this institution is going all-in against the market. Abraxas is known to operate a delta-neutral and funding-rate arbitrage strategy through its flagship vehicle, the Elysium Global Arbitrage Fund. In other words, these large short positions on Hyperliq**d are likely not purely a directional bet that prices will fall; they could instead be only half of a broader arbitrage strategy—where they hold long positions on other exchanges while shorting on Hyperliq**d to capture differences in funding rates across platforms, plus the possibility of hedging functions for spot exposure they hold elsewhere.

Even so, regardless of the true motive behind this strategy, the visible impact remains the same: selling pressure from large short positions continues to weigh on market sentiment, especially when it appears alongside other institutions doing similar things.

Bitcoin and Ethereum Still Stuck Below Resistance

On the other hand, today’s market data shows Bitcoin nearing short-term support at $65,000, while resistance above it remains strong enough to cap gains around $67,000. Bitcoin opened yesterday at $66,081, but has slipped back to the $65,000 range this morning, reflecting sell pressure that has not fully eased. Ethereum is trading around $1,899 to $1,933, with the next technical resistance near the 100-day moving average, close to $1,944.

Today’s pressure is largely driven by renewed inflation concerns amid ongoing tensions between the United States and Iran, along with oil prices still staying high—an overall combination that makes market participants more reluctant to take on risk assets, including crypto.

Bigger Picture: ETF Flows and the Shadow of a Fed Decision

Pressure on Bitcoin this year has also been tied to unfavorable spot Bitcoin ETF fund flows. Last June was the worst month in the history of U.S. spot Bitcoin ETFs, with net outflows of $4.5 billion, although early July briefly showed some flow reversal, sparking cautious optimism that the market’s bottom may already have been passed.

The biggest focus for the market is on the upcoming Federal Open Market Committee (FOMC) meeting on July 28 to 29, which is now viewed as the most decisive catalyst for the market’s direction in the near term. Unlike earlier in the year when expectations of rate cuts dominated, the Fed’s more hawkish tone from officials lately has led the market to start pricing in the possibility of rate hikes rather than cuts—a significant shift that has dampened investors’ risk appetite for assets like crypto.

Analysts’ Views Still Divided

Amid this pressure, analysts’ views on where the market goes next remain fairly split. Coinbase CEO Brian Armstrong previously said Bitcoin’s low might already have been passed around $60,000 last June, a view also supported by Bitwise Chief Investment Officer Matt Hougan. However, Grayscale analyst Zach Pandl is more cautious, saying Bitcoin could still fall further and may only find its bottom around September or October, with this scenario potentially changing if the Fed ultimately doesn’t raise rates and economic growth remains solid.

Standard Chartered continues to hold its optimistic year-end target of $100,000 for Bitcoin, even though that target looks far from current prices. Meanwhile, Polymarket’s prediction market points to a more moderate outlook: the highest odds suggest Bitcoin will end the year around $70,000 to $75,000, and Ethereum around $2,000 to $2,250.

What to Watch Going Forward

The combination of continually growing large institutional short positions, unbroken technical resistance, and uncertainty over the Fed’s policy direction creates a picture of a market that may still be prone to volatility in the near term. For market participants, these two things are worth closely monitoring over the coming week: whether Bitcoin and Ethereum eventually break their respective resistance levels with convincing volume, and how the results of the FOMC meeting on July 28 to 29 reshape expectations for interest rates for the rest of this year. Until that clarity arrives, the tug-of-war between institutions adding more short positions and the optimism of some analysts that the market’s low has likely already been passed will most likely continue to color price action in the days ahead.
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