We've all noticed the mass decrease margin on bitfinex, currently at 20,957,440 or a 6,472,450 total decrease from the recent median price . That my friends, is a lot of bitcoin!! Even if it was purchased at the highest price possible from the last major margin jump it would still be roughly 14k bitcoin. For reference there is 12.5 k bids to 300 currently (from 371.5) and 14k to 250.
For the purposes of this discussion, lets assume there is one or several people that work together (ie trading firm,pump group whatever) on finex.
So if one was in a position where he wanted to get out leveraged position and return to USD (for whatever ever) what would one have to do ? You would obviously sell, but how do you sell that big of a position, even with order book as full as bitfinex , without taking a serious loss ?
This is where the assumptions based on confirmed past events, narrative and possibly a bit of fiction comes in.
--begin story--
You would to create a series of events that buffers enough coin so that you could exit. Bags changing hands if you will. (since youre not concerned about manipulation charges since this market is unregulated) This costs money though - money which have you currently have tied up in a position. So first you have to exit some of your position (or cause an event that make people exit) by selling
1/8 -1/15 selling occured until 25,858,712 total margin was free or ~1.8 million dollar is freed up. That worked ok but you still have ~4.5 million locked up. Selling down further would potentially mean starting to take a costly losses to get out.
1/16-1/29 a serious of pump candles that were fully retraced the following day were drawn.
2/1 - 2/9 the final shaking of the branch happpens. The volume going equal almost that of going down exactly. No new lows made. But your margin position is now closed.
End result:
dollar margin usage is low
BTC is also low.
---end story---
So what does this leave with TA wise?
Given this, when was the last time we saw something with simliar characteristics? Answer: 11/11 -11/24
If this is indeed the same setup, it will likely happen with in the next 5-9 days.
Current price could close as low as 367.5 and still be valid.
A close below 360 would invalidate this theory. Support would be 350 at that point.
few other x factors worth mentioning
For the purposes of this discussion, lets assume there is one or several people that work together (ie trading firm,pump group whatever) on finex.
So if one was in a position where he wanted to get out leveraged position and return to USD (for whatever ever) what would one have to do ? You would obviously sell, but how do you sell that big of a position, even with order book as full as bitfinex , without taking a serious loss ?
This is where the assumptions based on confirmed past events, narrative and possibly a bit of fiction comes in.
--begin story--
You would to create a series of events that buffers enough coin so that you could exit. Bags changing hands if you will. (since youre not concerned about manipulation charges since this market is unregulated) This costs money though - money which have you currently have tied up in a position. So first you have to exit some of your position (or cause an event that make people exit) by selling
1/8 -1/15 selling occured until 25,858,712 total margin was free or ~1.8 million dollar is freed up. That worked ok but you still have ~4.5 million locked up. Selling down further would potentially mean starting to take a costly losses to get out.
1/16-1/29 a serious of pump candles that were fully retraced the following day were drawn.
2/1 - 2/9 the final shaking of the branch happpens. The volume going equal almost that of going down exactly. No new lows made. But your margin position is now closed.
End result:
dollar margin usage is low
BTC is also low.
---end story---
So what does this leave with TA wise?
- higher lows w/ a confirmed trend line
- high time frame over sold
- 1W stoch rsi reset poised to cross up.
- plenty of margin available to long
- low volume over all (with the exception of the pump and dump candles)
- horizontal support/resistance levels defended
Given this, when was the last time we saw something with simliar characteristics? Answer: 11/11 -11/24
- margin reach a low of 19,194,679
- margin reach a low before horizontal resistance would stop selling it down.
- high time frame oversold.
- higher lows w/ a confirmed trend line
- 1W stoch cross back up (after leaving the over bought range)
If this is indeed the same setup, it will likely happen with in the next 5-9 days.
Current price could close as low as 367.5 and still be valid.
A close below 360 would invalidate this theory. Support would be 350 at that point.
few other x factors worth mentioning
- btce has been 7-10 dollars ahead of finex this whole dump. finex has been leading.
- china 10-15 dollars ahead of finex.
- China barely follow the downward motion of finex and recovered way faster
- Chinese new years holiday concludes 2/12 - 2/13
- confluence of major trend lines around 2/12-2/14
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.