Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[oda.krell]

This is insane.

So maybe that's how we're going to go up this time...

One huge short squeeze, when price gets near 530 again, leading to a drop into the 400s, and, hey!, we have our 2014 SR event

You mean long squeeze.

Corrected it already

And, tbh, I don't really believe it. More likely that those longs will stick around for longer, dragging us down.

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[Cassius]

When do the squeezed longs become critical? Is there any way of telling?

[damnek]

This is insane.

Maybe it's someone who found an exploit in the lending system? I read that there were some shenanigans going on there a couple of days back..

[oda.krell]

When do the squeezed longs become critical? Is there any way of telling?

Judging by this clown, at around $510

[molecular]

This is insane.

So maybe that's how we're going to go up this time...

One huge short squeeze, when price gets near 530 again, leading to a drop into the 400s, and, hey!, we have our 2014 SR event

You mean long squeeze.

It seems to me those long positions have been built (in substantial part at least) below $600. Since finex allows only 2:1 leverage they not be zhou-tonged above $300. Correct?

[Raystonn]

USD loans don't necessarily mean a long BTC position.

[N12]

USD loans don't necessarily mean a long BTC position.

Correct. It also does not mean Bitcoin exclusively (some will be in Litecoin, but likely negligible). But they are usually so expensive to maintain that longer term they can pretty much be equated. And short term, we can assume that the vast majority is tied up in Bitcoin longs.

[Nicholas-Carraway]

USD loans don't necessarily mean a long BTC position.

Correct. It also does not mean Bitcoin exclusively (some will be in Litecoin, but likely negligible). But they are usually so expensive to maintain that longer term they can pretty much be equated. And short term, we can assume that the vast majority is tied up in Bitcoin longs.

Could you use the extra buying power just to put up a fake wall?

[Raystonn]

Think about this for a moment.  If you wanted to keep BTC down and you ran out of BTC to sell, one option is to take all the USD loans without using it to buy BTC.  You are effectively denying others the use of those funds.  This would be a DOS attack on bitfinex's margin loans, effectively hamstringing the longs.

[N12]

USD loans don't necessarily mean a long BTC position.

Correct. It also does not mean Bitcoin exclusively (some will be in Litecoin, but likely negligible). But they are usually so expensive to maintain that longer term they can pretty much be equated. And short term, we can assume that the vast majority is tied up in Bitcoin longs.

Could you use the extra buying power just to put up a fake wall?

Yes, as far as I know you can set up limit orders just fine with margin funds.

[molecular]

USD loans don't necessarily mean a long BTC position.

Correct. It also does not mean Bitcoin exclusively (some will be in Litecoin, but likely negligible). But they are usually so expensive to maintain that longer term they can pretty much be equated. And short term, we can assume that the vast majority is tied up in Bitcoin longs.

Are you guys implying that people are taking out loans and not using them for BTC longs, but instead just holding them? Why? To remove demand?

[oda.krell]

It seems to me those long positions have been built (in substantial part at least) below $600. Since finex allows only 2:1 leverage they not be zhou-tonged above $300. Correct?

1) 2.5 lever, I thought.

2) You're forgetting the substantial interest rate on USD

3) There might be some 'safety net' for the margin requirements... don't know. Any active finex traders can clarify?

4) I hoped as well that most of them got in sub-600, but I'm not so sure anymore.

[fonzie]

http://www.reddit.com/r/BitcoinMarkets/comments/28twpj/manipulating_bfx_swaps_for_fun_and_profit_a_howto/

[N12]

I wasn't implying this, I haven't explored this thought. If someone was manipulating this way, it would be extremely expensive to maintain with interest of 0.1-0.2% per day at least.

It seems to me those long positions have been built (in substantial part at least) below $600. Since finex allows only 2:1 leverage they not be zhou-tonged above $300. Correct?

1) 2.5 lever, I thought.

2) You're forgetting the substantial interest rate on USD

3) There might be some 'safety net' for the margin requirements... don't know. Any active finex traders can clarify?

4) I hoped as well that most of them got in sub-600, but I'm not so sure anymore.

Thing is that a cascade (positive feedback loop) can be triggered at a certain point depending on bid depth. So you'd need to know the point that would start the chain reaction, and not the point that the most optimal buyers (and yeah, interest rate goes on top of that) went in.

[Dragonkiller]

Wait, so why hasn't the price gone up? Doesn't that suggest that the borrowed USD is not being used to buy BTC?

[Nicholas-Carraway]

USD loans don't necessarily mean a long BTC position.

Correct. It also does not mean Bitcoin exclusively (some will be in Litecoin, but likely negligible). But they are usually so expensive to maintain that longer term they can pretty much be equated. And short term, we can assume that the vast majority is tied up in Bitcoin longs.

Are you guys implying that people are taking out loans and not using them for BTC longs, but instead just holding them? Why? To remove demand?

Or perhaps an effort to control price prior to an auction?

[Raystonn]

I wasn't implying this, I haven't explored this thought. If someone was manipulating this way, it would be extremely expensive to maintain with interest of 0.1-0.2% per day at least.

As long as the profit exceeds the expense, it will be done.  This is also a potential avenue for an entity like the Federal Reserve to disrupt the Bitcoin market.  They have unlimited USD at their disposal.

[Teppino]

looks like i still don't get clearly how usd/btc swaps works.
i tought that you "borrow" USD when you think btc will go down and btc when you think market will go up. The same you'll do with your bitcoins if you wanted to gamble the market but with less risk and less profit.
Now i see that USD swaps are way more than BTC swaps, to me this mean bearish sentiment, so why do you guys expect a "long squeeze" if the market is set up for shorting?

[N12]

looks like i still don't get clearly how usd/btc swaps works.
i tought that you "borrow" USD when you think btc will go down and btc when you think market will go up. The same you'll do with your bitcoins if you wanted to gamble the market but with less risk and less profit.
Now i see that USD swaps are way more than BTC swaps, to me this mean bearish sentiment, so why do you guys expect a "long squeeze" if the market is set up for shorting?

People are borrowing USD en masse (presumably to buy up Bitcoins) and the assumption is that most of this money is allocated in margin long positions. When the price decreases severely, a long squeeze can be initiated with a prone bid side on the order book because people will get their margin calls.

The opposite being people borrowing BTC and selling those but then the price increases and they get margin called.

[Raystonn]

You borrow USD to buy coins.  You borrow coins to buy USD (this is shorting BTC).

Or you can borrow all available USD and not buy coins, just to deny these funds to real longs.  Then you can borrow all available coins and short, pushing the market down.  This would show as the market dropping due to a lack of buying, which is what TERA has been pointing at for a while now.