We mention over and over the dangers of margin trading, especially at ridiculous levels like 25/1 or some even higher. We also mentioned we want to be positioned contrary to the herd. Well today many are waking up to their first lesson about risky trading and after bragging for weeks how much they are making shorting, are now in the red with gains erased and then some.
We will hear them blame the whales, talk about market manipulation, and how this should not have happened, but we have been mentioning over and over that the short interest was at all time highs and this is a perfect setup for a short squeeze. We positioned ourselves accordingly and the 1:1 R:R is now way into the money. This is where patience has paid off. Now we are not right on every call and the market has taken a different direction, but the difference is risk management.
If you are going to blame someone for getting REKT during the short squeeze, take a look in the mirror, and that is who you should be blaming. Taking unnecessary risks, trying to make a homerun where basehits win games is the reason your account is now zero. Sure we will hear the "ohhh i got out just before the pop" but I can tell you this is BS!
Technically we blew right through the 7480 level and are managing our current trades by reducing our ETH risk in half just hours before the pop. As our targets have been hit I am closing the BTC and other half of the ETH trade. 7480 is now the level that needs to hold, however, it can go as low as 7265 and still be a valid bullish move with extreme support at 7200. Right now it is risk off and wait for the market to stabilize, this is not the time to try and trade.
We have closed our BTC and ETH trades and shaved off half of the OMG positional trade. We did not sell any Wabi as this is a longer term hold and was trading at 90% below its high.
In closing patience has paid off in being positioned opposite the herd where when that moves happen it is painful.
@goldbug1, The volume is doubled from 4B/daily to 8B/daily (today), but the problem with this is just about the why? Other than trigger all the stop loss on short contracts I personally do not see any reason for this huge pump.
I start to imagine 10 morons closed in a closet play with us to screwed all our TA and make BTC go in opposite direction respect the common sense expectations.
I personally out in cash since the start of April due to the impossibility to trade anything without staying all day in front of the monitor expecting this freaking pump and dump with no reasons at almost the same time cycle.
I have no idea how to trade, based on TA, alts when they drop like crazy just because of BTC drop or how to trade BTC when pump & dump happen for no reason.
First, they make normal people consider BTC as a bubble bringing the value of BTC and alts 75% lower in just 3 months, now they are playing with us (traders) making almost impossible to forecast any type of medium and long-term prediction.
Only day trading and scalping are doable based on a very short time movements.
The only way for the establishment to avoid this revolution is not to rules the crypto, but to make it no more interesting for anybody.
Keep your eyes open, do not even try to catch the bottom (10-9-8-7-6-4-5-3....where is the bottom?) do not be greed and sacrifice profits in exchange for confirmations, stay away from leverage (too volatile) and always use stop-loss.....and taking your profit time by time and leave only a small portion for the long run (we do not know where this shit going, realistically talking, no other market in the history of the human being lost 75% of the capitalization in 3 months!)
Stay safe and make money!
BitcoinBearSlayer
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@caimano, The coinbase app on my android phone has a chart page. Under the chart are the buys and sells in graph form. If you zoom all the way out to see the big picture you will see there is a MOUNTAIN of people offering to buy and a small mole hill of people willing to sell. These of course are orders in the pipeline but I call them people as that is what they actually represents, people's intent. If that mountain decides it has to buy at higher prices then the squeeze is on.
In other words you can put in all the orders you want to buy back your shorts at 4K, 5K, 6K etc. but if nobody is willing to sell to you at those prices you are F-ed. I think that is what we are seeing. That mountain of buy orders is sitting there and nobody is willing to sell at those prices so a few are crossing the picket-line, if you will, and closing out there position at the higher prices. The rest of those orders are either fantasy longs hoping to get a rock bottom fill or bears looking to cover their shorts. Problem is, if there is NO inventory available to open a new long or cover you short what do yo do?
n3u120
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@Kwa, While I agree with your point, be careful reading order books. While this is true and the bigger picture looks as if we have far more buyers at these lower prices, many whales will manipulate the order book (especially in areas above and below current price). I've made a lot of money shorting bitcoin when I see a giant buy wall appear (was not the only reason I shorted on those plays). Calling their bluff.
There are some whales that will open a short and then market sell a large amount of bitcoin (1,000 and even 6,000 from the Gox whale). This clears all buys and drops the price $100-1,600 depending on order size, leads to market order panic sells and then bears are off to the races (or vice versa of course).
Also, there is a site called tensorcharts.com, it gives you a heat map of orders overlayed- it great for seeing supply and demand zones. Another great resource for reading orderbooks is data.bitcoinity.org/markets/books/USD, it shows all the order books and their chart is combined.
majic92
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@Kwa Gdax doesn't make the market volume, volume come to bitfinex okex binance, gdax is just a wagon of train and a shity exchange.
majic92
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@majic92, we still have to break the oblique resistance to confirm the trend
@caimano, i heard Saudi Arabia is now compliant with crypto and Bitcoin which was under uncertainty before an article published today . I am not sure if this has something to do with the jump
goldbug1
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@caimano, "I start to imagine 10 morons closed in a closet play with us to screwed all our TA and make BTC go in opposite direction respect the common sense expectations"
Actually the sign was the past few days where short interest continued to increase yet the price was not making new lows. Also the chart was showing consolidation not whipsaw movements which happens usually around bottoms. Look at the S&P it dropped then popped, then dropped and is consolidating sideways, which way it breaks nobody knows for sure, but after horizontal consolidation the move is usually an indicator of the new trend or a trend continuation.
This is what we saw and why we started adding.
goldbug1
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@caimano, Now this does not preclude larger traders seeing huge short and long term margin interest, and also seeing what we saw with the horizontal consolidation. What often happens even in liquid markets like gold and silver is they push into the long stops, triggering sellers which they start buying lower, and then because the short volume is already high shorts can not pile in with momentum, some start to cover, they then start buying on margin pushing it through the short stops triggering a squeeze and now they are sitting fat in position and take advantage of both sides of the margin trades. It happens, and that is what I suspect happened here.
After a miner bull move all of a sudden there was hesitation, then a strong dip, that dip immediately reversed and squeezed out the shorts. Some large institution actually have algorithms that calculate what it would cost and the return in pushing out long stops, and then short squeezing the piling in. Happens in forex, commodities etc. Where there is a bullish signal, it starts to move up on low volume, the push it down through the stop losses triggering a selloff where they start buying and shorts start covering, this creates a pop, then triggers the short squeeze.
megalo99
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Market sentiment does not make BTC go up 1K in 30 mins. ;) Be careful with those longs, too. It's been obvious for weeks with the jerky motions that come contrary to all indicators what the plan is long term. This isn't over, yet.
I start to imagine 10 morons closed in a closet play with us to screwed all our TA and make BTC go in opposite direction respect the common sense expectations.
I personally out in cash since the start of April due to the impossibility to trade anything without staying all day in front of the monitor expecting this freaking pump and dump with no reasons at almost the same time cycle.
I have no idea how to trade, based on TA, alts when they drop like crazy just because of BTC drop or how to trade BTC when pump & dump happen for no reason.
First, they make normal people consider BTC as a bubble bringing the value of BTC and alts 75% lower in just 3 months, now they are playing with us (traders) making almost impossible to forecast any type of medium and long-term prediction.
Only day trading and scalping are doable based on a very short time movements.
The only way for the establishment to avoid this revolution is not to rules the crypto, but to make it no more interesting for anybody.
Keep your eyes open, do not even try to catch the bottom (10-9-8-7-6-4-5-3....where is the bottom?) do not be greed and sacrifice profits in exchange for confirmations, stay away from leverage (too volatile) and always use stop-loss.....and taking your profit time by time and leave only a small portion for the long run (we do not know where this shit going, realistically talking, no other market in the history of the human being lost 75% of the capitalization in 3 months!)
Stay safe and make money!