the longs and shorts are two sides of the market.
we should keep them in balance, so the market can run very long time.
Now in BitAsset, the BTA shorters have an expiring date, but the BTA holders have not. This means holding BTA have advantage than holding BTS(or the bts collateral). So the BTA holders are winner, and BTS price is falling all the way.
In BitAsset 3.0, there is no solid time limit for BTA shorter too. But BTA holders have another advantage: can settle back BTS whenever they want.
And the settlement makes BTA not currencies any more. If we want to create BTA as currencies, then we just need to let BTA can buy BTS whenever they want.
What you called settlement seems not basic function of currencies, but some kind of bond. Correc me if I make mistakes.
EDIT PLUS:
For a healthy market:
if market mainly want to sell, sellers need place lower price orders to match buyers'.This leads the price to go down.
if market mainly want to buy, buyers need place higher price orders to match sellers'. This leads the price to go up.
In BitAsset 3.0, the settlement function make the market do not work normally. Hold BitAsset to get BTS, will not leads BTS price go up, but Hold BTS to get BitAsset leads BTS price to go down.
I suggest we need more consideration. Maybe just cancel the shorts time limit is enough, and market will do the rest.