Lose all your capital fast, with MatTheCat and his TA 101A!

[marcus_of_augustus]

Hey Mat ... whacha up to?

... feel like losing some more money tonight?

No thanks. I think I will stick to winning money. Your money, that is.

hehehe, you wish ... you're either brave or a fool ... whichever it's cool, better than the hordes of disingenuous that infest this place.

ready for some whaling?

[1714123897]

1714123897

[MatTheCat]

Hey Mat ... whacha up to?

... feel like losing some more money tonight?

No thanks. I think I will stick to winning money. Your money, that is.

hehehe, you wish ... you're either brave or a fool ... whichever it's cool, better than the hordes of disingenuous that infest this place.

ready for some whaling?

You are assuming I have a Bitcoin position at the moment.

I don't.

[marcus_of_augustus]

Hey Mat ... whacha up to?

... feel like losing some more money tonight?

No thanks. I think I will stick to winning money. Your money, that is.

hehehe, you wish ... you're either brave or a fool ... whichever it's cool, better than the hordes of disingenuous that infest this place.

ready for some whaling?

You are assuming I have a Bitcoin position at the moment.

I don't.

that's the same as being out of bitcoin, i.e. long fiat/ short bitcoin.

You're in the game whether you like it or not. There is no such thing as 'real money', only assets that you either in or out of ...

[tmfp]

That was a good hold last week in the low 40's.
I added a little more, but will stop it out at break even if we get back there this week as that would be a lower short term high, not fitting the bull side for me, being so close to important resistance around 70. A bit weak handed, I don't mind buying breakouts, but not so much anticipating them.
If we do break out above 70 it will be interesting to see how far it runs on short covering. Might even get tempted to add a bit more on a 78/80 daily confirm for a run into the 500's, but that would be too logical.  

If you are referring to that zerohedge article anticipating a massive short squeeze, what I would say to that is "where are the shorts"?...

I do read ZH mainly for its comedic value, but no, not for that reason. Despite people saying that TA doesn't 'apply' to Bitcoin because Bitcoin, I trade it just like anything else and know from experience that when you have a series of attempts on previous highs that you only need a few shorts for a squeeze to kick in on very low volume when they break.
There may not be much buying on stops if we do get to 470/500 but I think there maybe even less selling. Why would there be long liquidation in any volume just above previous highs?

[MatTheCat]

I do read ZH mainly for its comedic value, but no, not for that reason. Despite people saying that TA doesn't 'apply' to Bitcoin because Bitcoin, I trade it just like anything else and know from experience that when you have a series of attempts on previous highs that you only need a few shorts for a squeeze to kick in on very low volume when they break.
There may not be much buying on stops if we do get to 470/500 but I think there maybe even less selling. Why would there be long liquidation in any volume just above previous highs?

I am thinking more in terms of long liquidiation beneath recent lows.....

In periods lacking a strong fundamental driver, when the market is essnetially in stasis, I would argue that 'they' push the market in the direction of the greatest liquidity. i.e. 'they' run stops, whether they be long stops or short stops.

If there isn't going to be a big push timed for the Bitcoin halving event, into which ultimately 'they' are hoping to draw in a bunch of the public who might have last been interested in Bitcoin in late 2013, then the biggest fattest liquidity pools are actually down below at the moment, not up above.

Possibly, Bitcoin is in need of a good margin long wash out, one which will get the bears all excited and have them piling into short positions. If Bitcoin can get back down to $430- $440, with around $18K of shorts on the books (Finex), then that would be super bullish. The market would be primed for a short squeezing pump which would drive Bitcoin over $475 resistance, which would then in turn force stronger hands out of their shorts.

[MatTheCat]

I am becoming increasingly convinced of the bullish case with BTC here. There are however some things bothering me. Namely, the state of the swaps. I use Finex swap data for reference, as it is the only margin trading data that I have access to.

Current USD swaps (Margin Long Positions) on Finex = $31.5 Million
Current BTC swaps (Margin Short Positions) on Finex = 11.5K BTC

The USD swaps volume is just a fraction off record highs for Margin Longs on BFX. Record = $33 Million.
The BTC swaps volume is around 11.5K BTC. It's ATH was 35K on 27th April 2015, with BTC at $215. These shorts were gradually squeezed out of their positions. By the time Bitcoin topped out in July 2015, BTC swaps were at around 9K BTC.

Ideal conditions for a pump to commence, are low levels of USD swaps, having recovered somewhat from a recent bottom, and high levels of BTC swaps. What we have right now, is rather more the opposite situation, although who is to say, that the USD swaps on Finex can't increase to new ATHs up around $40 Million or even greater?




So it is with some caution, that I accept the bullish BTC case at the moment. As always, I can't buy in here, even if it is just a couple of bucks up the charts from my recent BTC long position, and I could technically view it as a continuation of the same trade. But that was then and this is now. This is a completely different trade, and only n00bs chase momentum. Here is the trade that I think I want to be in at this point in time:

[Wexlike]

Great analysis, Mat. Covering many points including the very important swap ratio. Pretty much sums up my thoughts.

[RyNinDaCleM]

Not only from a liquidity standpoint, but also a strength standpoint, If USD swaps are too high, there is a definite lack of power on the Bull side to make a strong pump. Buying alone can only get so far. Then margin must pile in to continue an up move, essentially 3.5x (regular buying + 2.5x margin) to break from a range. After that, the strength is gone. Since USD swaps are already at historically high levels, there may be a lack in that power. Plus, whales aren't out to make other's money, they are out to make others' money. A perfect setup right now would be to push back to 430, wash out longs as matt said, get high shorts, and push up. You then have shorts closing, longs with money to buy and normal market forces to help propel a 3rd wave to 550+.

[chesthing]

I want to see if it can hold $470ish, until then I'm watching.

[adamstgBit]

@High amount of longs

i think longs have been very "hard headed" throughout the bear market.
and alot of the pumping up after the bear market has been due to new longs
but i think all this can really do is set back the bitcoin rocket take off by a few weeks or a couple of months.

once these longs are paid in full with a nice profit, new longs will take there place, only this time these longs won't be looking to buy the bottom and sell the guaranteed bounce for some 25-40% profit. these new longs will be controlled by poeple who expect a crazy train followed by a explosion followed by a bubble! they will see there longs at 25-40% profit and NOT take profit.

I think in the bull market we can expect to gr8ly surpass the previous ATH in active longs.
its no secret that more and more poeple are using and learning about bitcoin, its in growth.
if bitcoin is still alive and kicking 2 years from now i expect all its numbers to grow, higher margin swaps, higher liquidity, higher price!

shorting this thing now looking for some 10-20% profit on down swigs, is like a cat trying to catch the red dot.


bears will be bears.

[RyNinDaCleM]

@High amount of longs

i think longs have been very "hard headed" throughout the bear market.
and alot of the pumping up after the bear market has been due to new longs
but i think all this can really do is set back the bitcoin rocket take off by a few weeks or a couple of months.

once these longs are paid in full with a nice profit, new longs will take there place, only this time these longs won't be looking to buy the bottom and sell the guaranteed bounce for some 25-40% profit. these new longs will be controlled by poeple who expect a crazy train followed by a explosion followed by a bubble! they will see there longs at 25-40% profit and NOT take profit.

I think in the bull market we can expect to gr8ly surpass the previous ATH in active longs.
its no secret that more and more poeple are using and learning about bitcoin, its in growth.
if bitcoin is still alive and kicking 2 years from now i expect all its numbers to grow, higher margin swaps, higher liquidity, higher price!

shorting this thing now looking for some 10-20% profit on down swigs, is like a cat trying to catch the red dot.


bears will be bears.

Absolutely, the numbers will grow in the future. At this moment, there are ~$4M available. Definitely room to rise, but it's not like there is $30M available. Rates are high(ish) and to take out longs here for a long hold, without a hardened uptrend is increasingly risky. So while there is not an extra $xxM worth of swaps available to make for more competitive rates, they won't be taken by long termers yet. This is still scalping territory. Short term longs when the timing is right.

Disclaimer: I do not condone shorting here unless you know the risks and even then, keep your coins and make small shorts if you must.

[Hunyadi]

Some of USD swaps are used to long ETH (and LTC).

[Kramerc]

What would be your analysis on the LTC swaps Mat? How would that interlink with the BTC swaps?

[MatTheCat]

Some of USD swaps are used to long ETH (and LTC).

 

I had completely overlooked that fact!

But my guesstimate is that the majority of the USD swaps are infact used in BTC, but I don't doubt that the LTC swaps have been insignificant, especially on it's recent pump.

So for a pure BTC sentiment barometer, that leaves the BTC swaps.

On 12th April, with BTC testing $430, BTC swaps were just under 18K. Some 8K of those were wiped out on the rise. That is 8K of unadulterated buying pressure, majority of it as resistance penetrating market orders as 'they' pushed BTC up against liquidity zones.

BTC swaps currently 11.3K, where they stood since before the $10 (so far) price correction. As far as stored up fuel for a break-out is concerned, that is just kind of 'meh'.

[MatTheCat]

I will have to hang my head in shame and admit I bottled out of a $445.37 buy in on Finex, which was placed right on the RLZ zone Sweet Spot (70.2%). Just seemed that BTC was getting there a bit too fast, and those big chunky red dildos don't just appear out of the blue without any mates following on behind them.....I pulled the buy in literally 30 seconds before it was hit....would have been good for a scalp trade if nothing else.

Also, those margin longs continue to pile up. The higher these margin longs get, whilst Bitcoin either remains static, or worse still, actually corrects, the more foreboding a picture it paints for BTC:





Think back to Aug 2015, prior to the Nov 2015 SR auctions pump, how 'they' let the BTC margin longs pile up on Finex, before dumping the shit out of the market, forcing the longs out of thier positsions at hefty losses, where 'they' were ready and waiting down below to scoop up all the liquidated BTC positions. As RyNinDaCleM mentions, I think it would totally typify Bitcoin, to have a great big pre-pump, dump, just in order to fuck over all the kiddies who got themselves a bit exciting drinking the old Bitcoin Kool-Aid, and piled precipitously into long positions before the time was really ripe.

[r0ach]

Mat, you make literally zero sense.  It's not actually possible for BTC to cross the halving finish line without an enormous amount of longs.  If you attempted to shake them out by dropping price, even MORE LONGS would pile on.  Contrary to popular belief, the Chinese aren't actually very smart.  At any math contest, there will be 100 Chinamen, but the top winners are always autistic white kids that operate on a level the Chinese can't even comprehend.  That's why you keep seeing Chinamen trying to do things like shake out longs, because they aren't smart and it's pointless to try.

They're trying to get people to make believe there's no point having a long open at all and get them to drop it.  Then one day out of the blue, you'll see Eth implode and BTC instantly go up $20, then everyone looks at price and says, "I'll just wait for it to drop and buy in", then it goes up $20 more.  This is the point where Mat FOMO buys, loses all his gains, and becomes a FOMO merchant, outsmarted by a 102 IQ Chinaman.

[MatTheCat]

Mat, you make literally zero sense.  It's not actually possible for BTC to cross the halving finish line without an enormous amount of longs.  

I agree.

When Bitcoin pumps, by the time it hits it's top, the margin longs will have increased considerably. If the top is a spike top, then these margin long positions very quickly evaporate. If we get a conventional M or double top, then what we see are longs pile up even higher. Whilst price fails to get higher. In a situation like this, which can admittedly drag out for some time, there is only one logical resolution.

We are actually seeing a little bit of this phenomena at work right now. When BTC got up to $472 on Finex, aside from the margin shorts taking an 8K BTC haircut on the move up from $430, margin longs were at just under $31M on April 26th. Last night (May 9th), when Finex hit $465, margin longs were at $32.6M. There were almost $2 Million more USD swaps required to have Bitcoin at $465, than have it at $472.

What does that tell you?

It tells me that someone is happy to let all the margin long traders eat up all the fucking Bitcoin they can take up in this price range. And of course, a margin position is a much weaker position than a solid 1:1 BTC position. When key supports get taken out, margin longs start to liquidate their positions. There has already been $1Million of USD swaps wiped out (only!) on that dump down to $445.

Margin longs are down to $31.6 Million, still $750K greater than they were when BTC topped on 26th April at $472, yet Bitcoin is currently at just $454.

Now maybe, just maybe, all the selling pressure is done, and those sitting underwater or treading water in margin long postions are going to be let of the hook. Perhaps during the N.American trading session, all the extra demand is going to overwhelm the selling pressure up in this range? But failing this, then margin long positions are looking fucking vulnerable right now. Worse than vulnerable. margin longs right now are looking like whale fodder.....i.e. likely to be forced to Market Order Sell into whale Bid walls down below.

That is how this shit works whether you like it or not, and it aint just those pesky Chinese either.

[MatTheCat]

[r0ach]

We had a 2 month long consolidation period at $420.  If you think the price can go anywhere near that again, you're out of your mind, completely out of your mind.  There's too many willing buyers now with only 60 days to halving.  The lowest "they" can flash crash it to with orchestrated racketeering is what you just witnessed when they did it 5 minutes ago ($445 for 2 nanoseconds).  There is no way to shake out longs and it's pointless to even try.  They would be setting their own money on fire trying to do so when they have to buy back in at a higher price.

[MatTheCat]

We had a 2 month long consolidation period at $420.  If you think the price can go anywhere near that again, you're out of your mind, completely out of your mind.  There's too many willing buyers now with only 60 days to halving.  The lowest "they" can flash crash it to with orchestrated racketeering is what you just witnessed when they did it 5 minutes ago ($445 for 2 nanoseconds).  There is no way to shake out longs and it's pointless to even try.  They would be setting their own money on fire trying to do so when they have to buy back in at a higher price.

Where there are margin traders, there are positions that can be shaken out the trade, that simple. And right about now, there are a big fucking glut of margin longs, many of which must be underwater by now.