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

[N12]

The most hazardous thing about this is that not only do they need the price to increase, not only do they need the price to increase before it decreases, but they also need the price to increase within a certain time. A prolonged sideways movement would kill them as their liquidation price rises along with the interest. Can you imagine the pressure that must be felt?

[ChartBuddy]

Explanation

[smiley123]

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.

To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC.  For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.

[Nicholas-Carraway]

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.

To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC.  For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.

If you look at the Chart Blitz posted, it doesn't appear that the borrowed $ (on balance) has been used to purchase BTC otherwise the price would have moved up as margin increased.  Right?

[molecular]

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.

We also might need to add that most people will probably put stop loss order well above their liquidation point.

EDIT: frankly I've been waiting for such a cascade (like in late 2011 with bitcoinica) of forced long liquidations for a while now, but it seems we haven't reached the point yet. There might also be countermeasures in place by bitfinex people who can predict this using their data.

[smiley123]

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.

To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC.  For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.

If you look at the Chart Blitz posted, it doesn't appear that the borrowed $ (on balance) has been used to purchase BTC otherwise the price would have moved up as margin increased.  Right?

Good question.  Not sure I can answer that.  One thing to keep in mind also is that no money actually changes hands until the position is closed.  You are just holding a contact (CFD=contract for difference) and paying interest on it.

[molecular]

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.

To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC.  For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.

If you look at the Chart Blitz posted, it doesn't appear that the borrowed $ (on balance) has been used to purchase BTC otherwise the price would have moved up as margin increased.  Right?

That doesn't follow, does it? There could've been selling pressure absorbing the demand. In other words: maybe the market would've dropped without the longs being opened. In fact it makes sense people would open longs even when the market is falling.

[Nicholas-Carraway]

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.

To make things even more complex, anything you put in your trading wallet can be used to borrow against at BFX, weather is it USD, BTC, or LTC.  For example, you could have LTC in your trading wallet and borrow the USD value of that LTC to go long on BTC.

If you look at the Chart Blitz posted, it doesn't appear that the borrowed $ (on balance) has been used to purchase BTC otherwise the price would have moved up as margin increased.  Right?

That doesn't follow, does it? There could've been selling pressure absorbing the demand. In other words: maybe the market would've dropped without the longs being opened. In fact it makes sense people would open longs even when the market is falling.

That is a definitely possibility.  It's just hard to imagine typical speculators would keep doing that in a declining market and driving margin to all time highs.   We'll see I guess..

[fonzie]

Increasing total sums of active swaps without paying interest

"So how can a lender manipulate this?

The most obvious way is to simply take all the lower rate swaps from the other lenders, forcing traders to take the higher rate swaps. Then close the unused swaps. Ofcourse the problem with this is that you're still paying interest on those unused swaps and BFX implemented a mandatory 1 hour interest charge on closing unused swaps specifically to deal with this sort of manipulation.

Game over? not by a long shot.

You can still take out swaps from other lenders and close them by closing them in a used margin position. For example, take a margin position of 1 btc. This takes up (at current rates) $600 of swaps. Now take out an arbitrary number of swaps from other lenders, say $600000 worth. Now just close "swaps used in margin positions" on the "total return swaps" page corresponding to that 1 bitcoin on margin. This subtracts the $600 margin from the $600000 of swaps you've taken out so you're left with $599400 of unused swaps....

... now repeat another 999 times....

Congrats! you've cleared out $600000 of swap offers from the orderbook while only spending interest on the swap in your actual margin position ($600). the 1 hour interest penalty for closing swaps only applies to closing unused swaps directly, it does not apply to closing swaps used in margin position."


SWAP demand wall also can be faked

"Placing huge swap demand walls is not that hard if even if you're not a whale. An idiosyncrasy about BFX is that you can stack multiple swap demands as long as they're each smaller than your tradeable balance. So even if you have only 1 bitcoin and an effective tradeable balance of $1000, you can just place a swap demand of $1000 a thousand times to give a wall of one million dollars. Give it a try, it costs nothing just to test it out. "

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

[podyx]

Things looking increasingly bullish

I think I can feel it coming!!
Gonna enjoy the next few months

[molecular]

SWAP demand wall also can be faked

"Placing huge swap demand walls is not that hard if even if you're not a whale. An idiosyncrasy about BFX is that you can stack multiple swap demands as long as they're each smaller than your tradeable balance. So even if you have only 1 bitcoin and an effective tradeable balance of $1000, you can just place a swap demand of $1000 a thousand times to give a wall of one million dollars. Give it a try, it costs nothing just to test it out. "

I just tried this. Doesn't work as advertized.

[JayJuanGee]

The most hazardous thing about this is that not only do they need the price to increase, not only do they need the price to increase before it decreases, but they also need the price to increase within a certain time. A prolonged sideways movement would kill them as their liquidation price rises along with the interest. Can you imagine the pressure that must be felt?

YOU make a pretty decent point here, Blitz - except it is my sense that the opposite is currently occurring.  There is probably considerable concern from various whales that there is pressure for BTC prices to go up near or after the auction... But a sufficient number of whales are o.k. with pushing the price down.. and they want the price to go down before going up.. or to stay down before going up.  They want to continue to extract coins in these price ranges for as long as they can... before the price moves upward (which seems inevitable, but a matter of how long it can be kept down). 

It is possible that whale manipulators can keep the price down, even after the auction, especially if we can get some more FUD or some more news that causes hesitation and they can exaggerate and manipulate that news for a while.... so for example, if we could get another US Marshall's sale of 144K coins in the near future.. then that may also help to generate additional concerns about how well the BTC market is going to absorb those coins... or maybe there will be some China news that can be worked (though that kind of china news does NOT seem to be working too well, recently).  Anyhow, my point is that there are ways to attempt to manipulate and keep the price down for possibly a few more months at the most?.... and at some point they won't be able to hold it back anymore.. and that is when we will get our CCMF... ... When exactly, though, for the CCMF, is really difficult to gauge exactly when and how far up it will go, but it's gonna be coming to a theatre near you..

[MoreFun]

I just tried this. Doesn't work as advertized.

As far as I know this was already fixed.

[ChartBuddy]

Explanation

[uhoh]

I just tried this. Doesn't work as advertized.

As far as I know this was already fixed.

It was, just more bullshit from Fonzie as usual.

[BitChick]

Things looking increasingly bullish

I think I can feel it coming!!
Gonna enjoy the next few months

This is what I thought a month ago.  I think I am always a little too optimistic so perhaps the time is now!?

I sure hope so.  I need the funds for a mission trip I am taking to India.  I was really hoping the price would be up to $1000 by now, or early in July.

[upupup]

Guys, how do you put stop loss orders? Do you trust it to third party? Dont afraid to?
Thanks!

[empowering]

The most hazardous thing about this is that not only do they need the price to increase, not only do they need the price to increase before it decreases, but they also need the price to increase within a certain time. A prolonged sideways movement would kill them as their liquidation price rises along with the interest. Can you imagine the pressure that must be felt?

Psychopaths do not feel pressure.

[fonzie]

I just tried this. Doesn't work as advertized.

As far as I know this was already fixed.

It was, just more bullshit from Fonzie as usual.

It was just a hint to one/two of their multiple bugs that have been discovered in the last months, and proves that their stats are/have been not always reliable. This one(fake demand wall) may have been fixed 3 days ago, so we can be assured that these stats right now show the actual truth? Just a week ago everything was not real....


(Does anyone remember the 50m bid depth on Gox btw(real as fuck), weeks before they went down.... )

[blatchcorn]

Things looking increasingly bullish

I think I can feel it coming!!
Gonna enjoy the next few months

Yup this is a perfect bear trap