From yesterday's accelerated opening of short positions, it is now starting to unwind, so now we will see how far their buying and closing their position will take the price. Short covering is always the start of the rally!
@stilvortalent, The short chart shows how many positions have been opened on the Bitfinex exchange. The shorts are traders who believe the price of BTC will go down so a rise in the shorts is the inverse of the price of BTC. In this chart above it shows the lower BTC price went the more shorts opened up more positions and at the moment that the shorts start to close out their position they have to buy back BTC in order to close the position. This represents buyers into BTC and therefore you get a bounce in price. The higher the BTC price goes the more the shorts will want to close their short position so you can get sharp rallies in BTC due to shorts having to cover their position (buy btc to close out their short). It is the exact opposite of a situation where you buy BTC at $10,000 and it goes down and you sell at $9000 to prevent more losses. In this case, the shorts will buy back BTC in order to prevent losing money on their short as BTC rises.