https://www.investopedia.com/terms/l/leverage.aspLeverage is playing with money you dont have.
You just borrow it from the house and put it in some asset.
In a bear market, leverage is used to short positions quickly.
But as it happens with gold, the house need to hold the asset in custody so that shorting would affect its price.
Notice the constant pump recently, only green candles and no correction. This is not the behaviour of our usual whales.
This is the behaviour of someone who received a green light to buy and is covering a lot of positions, rising the price up. In other words, the hedge funds themselves are buying bitcoin to hold it in custody, as digital gold.
However, the difference here is that most gold is held in custody, by States, by banks and stock markets, whereas bitcoin is hodled by its users. Most of the bitcoins are not on the exchanges, and the limited supply keeps the price rising.
Now, lets imagine a hedge fund buy one million dollars of bitcoins in Bitstamp, for example (I dont know if it is the fund or CME itself who buys it, but lets suppose its the fund). They hold it in custody, then bet for a fall in CME, using 10x leverage, that is, they borrow 9 million dollars and bet on half the current price.
Then, they dump their coins in Bitstamp, for half the price they bought for. The weak hands panic and sell their coins, some hodlers get out of their hideouts and throw some of their coins too. The price drops to half, the fund win the bet, and get 10 million dollars. They can use one of these to buy bitcoin again, so the price will pump one more time, the same way its pumping now, only green candles.
Now, I doubt one million dollars would make a difference, but these funds have millions at their disposal.
I dont know if the whales know about such mechanisms, but people should be informed about what the sharks can do using their instruments. They can margin-trade with higher values than in any bitcoin exchange, and they will settle it in cash. However, someone needs to buy the supply. Limiting the supply might reduce the shorting effects, and those funds can lose their bets and get rekt, but for this people should be hodling, even in the face of a quick fall.
You supposition relies on the price crashing down to whatever the try to sell it at. It doesn't matter if they set a sell order at half the price, it has to go through the entire order book to get down that far. Or even if it did, people would buy it all up extremely quickly. As we've seen in the past two corrections, which came all the way back up to hitting ATHs after one week! Also you gloss over your point that they are selling their bitcoins for half price! So they're definitely losing money, in the hope (read: risk!) that they can crash the price enough to gain money on some leveraged futures contract (btw do these futures exchanges even offer leverage?) and if they fail guess what they don't just lose half the money they used on the bitcoin, they end up losing wayyy more money than they spent since in your example they leveraged 10x!
That would be an insane risk to take. Now what they might do is buy bitcoin, wait a while until they've made good profit, and then try this. But then still the price will keep going up since all these investors have to buy up and wait to make profit before trying this. Because if they fail they would want to at least have the profits from their bitcoin offset the losses from their futures failure.
And as far as your bolded part, judging by what coinbase has said, there's probably been well over a million new people who have gotten into bitcoin just in the past 5 weeks or so. You ever think that maybe the huge influx of new money coming in could be responsible for a lot of the huge rise in price? Not to mention the fact that your claim that it keeps on rising with no correction is entirely false as we've had two corrections in the past month!
