Cryptocurrency traders who bet against Bitcoin last week lost hundreds of millions of dollars, according to a new BitStacker report.

According to the report obtained by Peoples Gazette on Wednesday, $386.74 million in short positions on Bitcoin were closed out between January 10 and January 16. A number of exchanges, including Binance, OKX, Bybit, Huobi, Bitmex, Deribit, CoinEx, and Bitfinex, experienced this.

BitStacker claims that the fact that traders lost close to $400 million in a single week is an example of the dangers associated with short-selling trading, which is a strategy in which a trader bets that the value of an asset will decrease.

This is the polar opposite of the typical investment strategy, in which a trader invests in an asset with the expectation that the asset’s value will rise over time.

However, Bitcoin’s market cap has increased by nearly 25 per cent in one week, emphasising the risks of shorting cryptocurrencies.

The worst day for bitcoin liquidations, according to the report, was January 14.

On that Saturday, traders who were betting against Bitcoin lost $141.01 million, continuing a growing trend over the previous four days where investors lost money when shorting the cryptocurrency.

Kris Lucas, a BitStacker analyst, commented on the development and suggested that the pattern may be a sign that the crypto winter is about to end.

“While it’s always sad to see traders losing money on their investments, the study does show that cryptocurrencies might finally be bouncing back.

“2022 was a very tough year for crypto coins with the collapse of several major exchanges as well as the Terra stablecoin.

“However, the fact that Bitcoin is starting to regain its value could suggest that the so-called ‘crypto winter could soon be over,” Mr Lucas said.