The Bitcoin market has changed. This is why shorting is so perilous and constrained.
The risk-reward setup is overwhelmingly in favor of the bulls. It looks like Bitcoin is receiving robust purchasing support in the vicinity of $70,000. So that the downside is capped, and the upside is open. Bitcoin traders anticipate even more growth to, say, $120,000. Shorting, on the other hand, will just make investors lose time and money.
Crypto volatility compounds the risk. Bitcoin can make $10,000 a day. Short sellers often employ leverage to maximize returns, and in the face of such volatility, they are at a high risk of liquidation. Most exchanges have already limited or eliminated leverage options to mitigate this risk.
Regulators remain concerned about crime and market abuse in crypto. More than $40 billion in crypto will be streamed into illicit activities in 2024. That figure might increase still further as new information arises. For this reason, regulators are hesitant to permit hazardous trading implements such as shorting absent stringent regulations.