The rally in bitcoin ( BTC-USD ) could mean more losses for hedge fund short positions, according to J.P. Morgan’s Positioning Intelligence report. Bitcoin ( BTC-USD ) is up 159.83% year to date, and up 24.02% from a month ago. The price of bitcoin and how hedge fund shorts perform can be “indirectly linked” because of how risk sentiment affects them. But, according to J.P. Morgan analysts, there could be a more direct link between them because of retail investors. Both Bitcoin and prices of securities shorted by hedge funds have risen because of the recent rally. But Bitcoin’s gain since early October has exceeded hedge fund shorts. "Thus, given the large gap and lack of an independent jump in HF shorts, the rally in Bitcoin could be pointing to more upside (i.e. pain) for HF shorts," J.P Morgan said. Hedge fund shorts tend not to jump when Bitcoin was down or flat, the report said, and in the instances they have, that's been a sign that the shorts are “topping out" and “has often coincided with more significant hedge fund de-grossing.” De-grossing is when funds sell longs and cover shorts Examples of that were January and June of 2021; August and mid-November of 2022; and early February, June, and July of 2023. “If macro data holds up well, there’s still room for recession fears to fade, which could lead to further upside, especially in the riskier pockets of the market (which HFs tend to be short),” the report said. “The main risks to this are poor macro data, a slowdown/reversal in retail flows into year-end, and overall positioning back to being modestly above average.” More on Bitcoin USD: Bitcoin: Liquidity Proxy Bitcoin Valuation: Four Methods Bitcoin And Stablecoins: The Monetary Gates Are Open Robinhood launches commission-free crypto trading in EU Bitcoin hovers near its most overbought levels in all of 2023 as it surpasses $44K