It's bearish. The amount of money loaned out to take longs is now at an all time high meaning prices have been supported on fake money. Now the supply of real money to lend out has dried up which results in the supply/demand you mentioned. This is going to cause interest rates to rise. The higher interest rates will force people to dump as it is no longer profitable to hold with the way the trend currently is. This could end up turning into a cascade of stop losses and margin calls as 40,000BTC purchased with loaned money are dumped.
uh, what?
it means that people want to borrow 11 million USD, (to buy Bitcoins, what else?), but they can only get 1.1 million
isn't that extremely bullish?!
No. Loan demand is not bullish because in order to fill the loan, someone else has to front the USD, which means that those USD cannot be used to buy bitcoins. It all sums out to zero. The only thing that really causes growth is when new fiat is wired in, which actually increases the amount of USD which can be used to bid on Bitcoins at a given time. Actually I would prefer no loans were given out at all and that all USD were directly used to obtain real bitcoins. The margin state is actually more bearish than the non margin state. Here are some more reasons why:
1. The margin positions only exist on paper in the user's account. The only thing he can possibly do with his position is dump it to take the shiny green profit figure shown next it. The user cannot withdraw those bitcoins or participate in the bitcoin ecosystem.
2. The user is subject to an interest rate which means it is most likely intended only to do a short term trade, and if the trend is not rising fast enough to be worth interest rates then he will dump.
3. The above factors reveal the psychology of a margin user which is just to do short term trading, dump, and make profits rather than being a long term investor in Bitcoin.
4. The rising interest rates entice bitcoin holders to dump their bitcoins to obtain USD to fulfill the loan demand.
5. The margin user can be liquidated and forced to dump if the price drops too low.
6. If people with real USD decide to leave the exchange after the margin contract period is up, this will also force liquidate the margin users.
FYI actually the loans can also be used to buy Litecoin and Darkcoin (duh) but the points above are stronger / more relevant.
A couple of holes in this analysis.
Without the benefit of any hindsight, those conditions do not necessarily represent a zero sum game or negate a bullish trend.
You are assuming that both parties have the same risk profile and they'd necessarily use the same money to bid on bitcoin so that they always swing to either side. Otherwise, if what you are saying is true, one half of the USD swap's order book would always be empty or largely empty.
I could just as easily wire in USD to lend it without being interested at all in bidding bitcoin and absorbing larger volatility. It's precisely the order book imbalance AND different risk profile that makes it a NON-zero sum game.
Rising interest rates are normally accompanied by rising bitcoin price , which can produce vastly larger returns than the collected interest rate after selling the those coins and lending USD. In this case you are again making a similar assumption as before: that the higher-risk profile of a bitcoin speculator can just as easily be converted to the low-risk, low-return lender. Even after giving the benefit of the doubt why would they not instead lend bitcoins at a locked high rate if they start to see price stagnation or foresee a decline?? It doesn't necessarily have to be USD lending.
It's not apples to oranges so in sum: I think the data and charts we see is so convoluted and represents different people with different interests and different investment horizons that it doesn't necessarily mean a move in any particular direction.
Better use and return of time spent in understanding the REAL fundamentals and valuation modeling of bitcoin.
