With Short positions at fairly low levels, shouldn't bitcoin's price have risen more than this?

The recent rally appears to have been partly driven by a short covering rally.

Look at this:

(Source: https://twitter.com/24KCrypto/status/1083017779974991873)

Short positions were up near 42k in mid December.

Now, they are down around 23k.

Does this mean we are more likely to go down from here as opposed to up?

I can't say for sure but if we go up it won't be on the backs of short covering.