Short

BTC - Hedge into eating funding?

Updated

Hedge from 67.8 against spot buy as RSI and OBV start showing weakness. Aiming 0.5 / 0.66 retrace but no profit taking, if it goes lower we will eat funding.

Ideally we see a small dump during daily open and then bleeding back to break out area.

Comment

Daily open dumped slightly, no follow-through but it did confirm local resistance.
A slow bleed followed by a retest of entry 67.8

Currently trading at 66.7 with funding board completely red. Highest funding rate on Okex 0.0703%

Comment

48h later. After a stop run to 69k, TP1 0.5 fib level has been hit to the wick.
Funding board still red now with multiple exchanges above 0.06% If people leveraged up on this small retrace, a liquidation cascade has yet to start.

Options:
1. Full TP
2. Partial TP, stoploss at BE
3. Partial TP, stop loss at entry
4. Let it run

Note to consider; when working with stop loss, place it loosely above numbers of interest. (8888, 69, round 10k numbers)

Comment

Funding board still red. Bybit 0.07%

One could say this was almost a perfect hedge with a week of free juicy funding piling up for us.

Currently on the 3th touch of the 0.5 / 0.61 Fib level, if it doesn't break then take some more profit off the table.

If it breaks, sell some spot on the retest and led the shorts run down with short/spot amount ratio greater than 2:1
This way, you basically get free leverage and free collateral

Trade closed: target reached

Broke down on the 3th touch reaching the upper line of the horizontal buy channel, followed by a perfect retest on 0.5 Fib level.

Currently trading inside the buy channel. Funding calmed down as well so a good time to take extra profit while waiting for a new structure to form.
Buy channel may be invalidated if another bearish set up forms.

Comment

Buy channel has been lost. No clear structure is forming. Funding board is neutral but leaning slightly more to the bullish side with negative rates popping up. Only Bybit still above 0.05%. Are these leveraged traders?

Since entry it has been mainly aggressive selling. There has still been no liquidation cascade as of yet. Multiple intra-day supports are lost, it could go south very quickly. That is where we will completely clean our shorts and enter spot while building longs again.

Note to consider; a 'healthy' funding board should show 0.02% average in current market.

DDXagust

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