BTC margin long volume vs price on Bitfinex

2018年2月4日

After 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).

2018年2月4日

註釋

A clearer example of the divergence:

2018年2月5日

註釋

So the weekly just closed and it is not pretty:



* Lower intra-week low
* Lower close
* TD on a 5

These are some more indications that ~6k is a potential.

2018年2月5日

註釋

We are now below the daily 200MA. Look for a close below it to confirm going lower:

2018年2月6日

註釋

So we dipped into 6k over the past 8hrs or so, which wasn't a surprise if you have been following my updates.

Looking at the weekly, this still has the potential for lower lows; somewhere in the range of 4k - 6k (I know this is big, but I'll tighten it up as I get more data).

Once thing I have noticed going back to the original idea of margin longs being an indicator, is that I'm starting to see a fractal pattern:



Key things to watch for:
* Increase in longs above 31k
* Price differences vs longs ie. price decreases as more longs are opned

This could set up another long squeeze.

2018年2月7日

交易結束：目標達成

So we reached the price target of ~6k from the original idea, so I will close this out.


I still have some concerns that longs are over leveraged. But we will see what happens once they start closing.


What would be ideal is if we close the week >9k, which would form a hammer candle, which would indicate a reversal.


I'll create a new idea soon to indicate where to next.