BTCUSDLONGS trade ideas
Margin AnalysisBy taking longs/shorts ratio we get a cyclic chart and it is near past history lows. But as always it can break down on extreme panic sells and BTC is yet to see some panic like previous leg down to 6K. So I am sharing this as a point of attention.
capitulation is coming.Long vs short ratio analysis. I believe it can be used as confluence to my previous posts. Big drop coming.
BTC LONG interest to IMPLODE, more sell-side pressureShorts (BTCUSDSHORTS) are nearing the high from 10/9. Additional short sellers might be coming late to the party.... or maybe not. Longs (BTCUSDLONGS) have finally begun their fall, but they haven't fallen miraculously (yet), especially considering long interest (BTCUSDLONGS) was at an all-time high!
What this says to me is the perma-bulls maybe have continued taking out margin positions long (potentially leveraged).
We are seeing some sell side pressure now, from those long positions being closed. That being said the Long interest is still very high. I view this as a strong potential for a squeeze and cascading selloff. The individuals trading margin recently on bitfinex are probably not the hodlers, so the impending squeeze, imo, will accelerate the sell-side pressure.
The long interest was likely run-up by perma-bulls who like to "Buy the dip, bro". As many of those individuals are leveraged, I anticipate a mass exodus from Long positions as the price decline further squeezes them. That may in turn bring some late-to-the-party short-sellers to the table. If we test or pass 6k, it will be due to this cascade effect. Otherwise, I think 6k is strong psychological support.
*This information represents only my opinion, and is not a recommendation to buy or sell*
BTC Longs Observation. Just to see what happens going forward. BTC 2.42% Longs on Bitfinex are at an all time high as of yesterday.
Exactly what I expected.When everyone expect a bullish market and there's a slight dip, lot of people get margin call/close their long position, causing a massive sell off and thus, an even deeper dip.
Bitcoin Cycle on Long Position + Price Pointscurrently at BITFINEX LONGS ATH, shorts are starting to enter positions too.
7k on the horizon
BTC margin long volume vs price on BitfinexAfter calling the recent drop from 12k to 7.9k , I got the sense that BTC hasn't bottomed yet despite many calling the bottom. So I started looking for other indicators and pieces of data that may corroborate this hunch.
Initially I started looking at the long (BITFINEX:BTCUSDLONGS) and short (BITFINEX:BTCUSDSHORTS) positions on Bitfinex as a way to gauge when to exit my margin positions. However, as I went back over the data we had (which admittedly isn't a great deal as Bitfinex only started providing the data on the 20th of August 2017), I started to notice that we topped out at around 32k of BTC longs. This coincided with a couple of major selloffs, including the last drop from 12k, and the prior one from 20k.
Im not sure if this is a glass ceiling, or a hard cap, however it seems pretty clear to me that we are seeing divergence of BTC price vs number of long positions. ie. price is going down despite an increase in longs.
I feel this provides some evidence towards the idea that we will push considerably lower due to a "long squeeze".
I also mentioned a few days back in my prior post that if we close the week below the weekly 20EMA, we will head lower to the 50MA for support.
A few days back
Now
I believe we are going down to between ~6k (+/- 500).
BTC longs Vs. shorts on bfxChart says it all. Just an interesting view on whats going on that you might have forgotten you can pull up.
How to find market bottoms-- HOW TO FIND MARKET BOTTOMS --
Here we see that btcusdlongs/btcusdshorts gets a huge spike upwards while bitcoin itself is going down.
Similar to RSI, this is a classic divergence that shows that people don't feel safe holding shorts any longer and/or want to go long and catch the bottom.
With a btc/usd overlay it's very easy to see how during previous btc bottoms, btcusdlongs/shorts gets a huge spike and soon after btc/usd rebounds as well.
Another tool i like to use is the cm williams vix fix that finds market bottoms by itself, just make sure to use it on multiple larger time frames to confirm the absolute bottom.
Continued Bitcoin Growth ExpectedFor the upcoming next few month, a continued demand of Bitcoin is still to be expected and it can easily pass $18k, $20k, and the $25k trendline. This is due to increased use of the technology as well as market adaptation of the blockchain or decentralized nodes continued to be rolled out. It is still however, not based on pricing but also the expected roll out of technologies in 2018. The risk is medium but favoring the side of continued growth thus far.
#BTC long positions are not supporting price rallyLong/short ratio was in line with the price trend since mid-Sep (in the available data) but since the last week of October, there is a significant divergence.
This means even the price increases, the long positions are not rising that much.
