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Author Topic: Warning: How many of you Bears have ever been a victim of a Short Squeeze?  (Read 41101 times)
cypherdoc
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October 20, 2011, 05:05:22 AM
 #21

imagine that all those bids at $2 get impatient and decide to wipe out all the ask side book.  if you're short, you're gonna get killed.
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pennytrader
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October 20, 2011, 05:12:26 AM
 #22

The title of the post made me laugh. Typical pump-and-dump penny stock newsletter will often pump a penny stock like that "the thing is gong higher because of short squeeze..." (although I don't think BTC is completely a penny stock).

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cypherdoc
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October 20, 2011, 05:33:13 AM
 #23

The title of the post made me laugh. Typical pump-and-dump penny stock newsletter will often pump a penny stock like that "the thing is gong higher because of short squeeze..." (although I don't think BTC is completely a penny stock).

yeah, but this is different.  at Bitcoincharts you can see the order book.  look at the USD amount stacked up on the bid side esp. at $2.  if all those buyers decide to hit the ask side it would wipe out the entire book and the shorts will get hurt badly.
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October 20, 2011, 05:57:30 AM
 #24

I would hope an 'expert' such as yourself would at least know that most of those buy walls are fake. 
cypherdoc
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October 20, 2011, 05:58:56 AM
 #25

I would hope an 'expert' such as yourself would at least know that most of those buy walls are fake. 

why don't you try shorting into it?
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October 20, 2011, 11:39:47 AM
 #26

yeah, but this is different.  at Bitcoincharts you can see the order book.  look at the USD amount stacked up on the bid side esp. at $2.  if all those buyers decide to hit the ask side it would wipe out the entire book and the shorts will get hurt badly.

I'm part of the $2 bid 'wall', simply because people run around this forum chanting things about The Manipulator.  Well, it sounds like a fun game.  I want to have a snazzy title too.

I can assure you I have no intention of raising my bid from $2.  If anything, I'm going to drop it if the asks approach $2 at a rapid pace.  I almost pulled out when the 'wall' was sniffed at $2.04.  I also have no shorts and will not consider taking any out in a commodity as highly variable as bitcoin.  Back in September we saw hacked accounts being used to wildly swing bitcoin's price.  It swung 50% within minutes.  That's an insane market to short.

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cypherdoc
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October 20, 2011, 12:57:27 PM
 #27

yeah, but this is different.  at Bitcoincharts you can see the order book.  look at the USD amount stacked up on the bid side esp. at $2.  if all those buyers decide to hit the ask side it would wipe out the entire book and the shorts will get hurt badly.

I'm part of the $2 bid 'wall', simply because people run around this forum chanting things about The Manipulator.  Well, it sounds like a fun game.  I want to have a snazzy title too.

I can assure you I have no intention of raising my bid from $2.  If anything, I'm going to drop it if the asks approach $2 at a rapid pace.  I almost pulled out when the 'wall' was sniffed at $2.04.  I also have no shorts and will not consider taking any out in a commodity as highly variable as bitcoin.  Back in September we saw hacked accounts being used to wildly swing bitcoin's price.  It swung 50% within minutes.  That's an insane market to short.

yes.  maybe i should start manipulating too.
cypherdoc
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October 20, 2011, 01:17:55 PM
 #28

its very simple and straightforward.  guys like Nagle and Shinobi and the rest of the Bears should take the free money at $2 via all the shorts they can get their hands on and wait for the price to go to zero.  its a foregone conclusion.

Nagle: "This thing is over."  "Get out now!"

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October 20, 2011, 01:26:56 PM
 #29

   Me thinks people spend too much mental energy arguing such things.

  It's pretty easy to spot the bear shit while walking through the forest. Even if you can't see the bear, you would still reconize it as bear shit and would avoid stepping in it. right?
  It probably smells too, especially if its fresh. Just sayin'.   Smiley


   Cheers

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cypherdoc
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October 20, 2011, 01:37:11 PM
 #30

   Me thinks people spend too much mental energy arguing such things.

  It's pretty easy to spot the bear shit while walking through the forest. Even if you can't see the bear, you would still reconize it as bear shit and would avoid stepping in it. right?
  It probably smells too, especially if its fresh. Just sayin'.   Smiley


   Cheers

you're absolutely right.  focus on the fundamentals.  no blockchain disruptions.  no security experts like Dan Kaminsky have found ANY holes in the code.  no major failures at mtgox since the one time hack.  innovations continue to appear everyday.  Bitcoin marches on.
Litt
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October 20, 2011, 02:43:21 PM
 #31

   Me thinks people spend too much mental energy arguing such things.

  It's pretty easy to spot the bear shit while walking through the forest. Even if you can't see the bear, you would still reconize it as bear shit and would avoid stepping in it. right?
  It probably smells too, especially if its fresh. Just sayin'.   Smiley


   Cheers

you're absolutely right.  focus on the fundamentals.  no blockchain disruptions.  no security experts like Dan Kaminsky have found ANY holes in the code.  no major failures at mtgox since the one time hack.  innovations continue to appear everyday.  Bitcoin marches on.

what about bull shit?
sadpandatech
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October 20, 2011, 03:03:59 PM
 #32

   Me thinks people spend too much mental energy arguing such things.

  It's pretty easy to spot the bear shit while walking through the forest. Even if you can't see the bear, you would still reconize it as bear shit and would avoid stepping in it. right?
  It probably smells too, especially if its fresh. Just sayin'.   Smiley


   Cheers

you're absolutely right.  focus on the fundamentals.  no blockchain disruptions.  no security experts like Dan Kaminsky have found ANY holes in the code.  no major failures at mtgox since the one time hack.  innovations continue to appear everyday.  Bitcoin marches on.

what about bull shit?

  makes good fertilizer? ;p

If you're not excited by the idea of being an early adopter 'now', then you should come back in three or four years and either tell us "Told you it'd never work!" or join what should, by then, be a much more stable and easier-to-use system. - GA
It is being worked on by smart people. -DamienBlack
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October 20, 2011, 03:35:19 PM
 #33

I agree with cypher.
It is not about if, but when a short squeeze or short term big bounce up happens. Sentiment is perfectly set up for it, as most people firmly believe they can get bitcoin much cheaper, and will be surprised if the market runs away from them..

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BitMagic
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October 20, 2011, 04:14:40 PM
 #34

imagine that all those bids at $2 get impatient and decide to wipe out all the ask side book.  if you're short, you're gonna get killed.

It's already been said, but how can you trust anything about the order book, considering how long you've been here? There is absolutely no reason to believe anything of substance is sitting in that wall.

Back in September we saw hacked accounts being used to wildly swing bitcoin's price.  It swung 50% within minutes.  That's an insane market to short.

And long. The direction of the position isn't important here; it's holding on margin. Those swings + spread + how high you let your maintenance get is what makes volatility so dangerous here.

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fivebells
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October 20, 2011, 04:55:02 PM
 #35

The animosity towards shorts is understandable, but I am about 80% confident that the recent crash was not caused by shorts, but  a big dump from a long holder who decided to flounce away from the bitcoin scene.  I am by no means a skilled trader, but  I would assume that the most effective short strategies involve relatively short-term positions, and contribute very little to overall price movement.
BitMagic
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October 20, 2011, 05:43:44 PM
 #36

The animosity towards shorts is understandable.

This is where I wonder more and more about the cognitive disconnect people have about bitcoin. There are so many pumpers around here, lamenting short-sellers. In any normal market, we would all be saying "great!" to short-selling; it's responsible for the revelation of true prices in the face of overblown hype (longs being the opposite in terms of excessive pessimism). However, the negative sentiment towards shorting around here tells me that people really do know (or at least feel) the risks of low USD/BTC exchange rates: attack vulnerability, failing exchanges, and massive market manipulations by average people. It's kind of like everyone knows that downward price pressure really increases the risk of full-blown failure, and so the opposite "it will never die, (screw short-sellers!)" mentality has to surface for self-preservation by long-position holders.

I am by no means a skilled trader, but  I would assume that the most effective short strategies involve relatively short-term positions, and contribute very little to overall price movement.

Well, you're not totally right on that. Effective short-term shorting requires low volatility, and as instant-as-possible trading. Neither of those exist for BTC. In addition, the most convenient way to short is Bitcoinica, and they are a brokerage, so your activities there are not reflected immediately in the exchanges. They could be aggregating all kinds of movements in whatever direction their hedging algorithm dictates at the moment through many small trades, or single large ones.

With that layer of opacity (and market power) between your trades and the exchanges, it's a difficult argument to say that shorting BTC really is improving fundamental price discovery. Mr. Z can state his intentions all he wants, but the fact is he can act as a market maker at any point.

Again, I think most people at least feel this, if not know it explicitly about bitcoin: falling prices are a serious risk for the sustainability of bitcoin.

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BC-Trader
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October 20, 2011, 06:21:25 PM
 #37

This is a funny thread.



First of all

Bitcoinica by all measures is a bucketshop, the people playing there are playing against bitcoinica. No matter WHAT they say they are a bucketshop just like a huge majority of forex brokers facing the USA

So people shorting bitcoin over at bitcoinica has no effect on market price.



Moving on,

Bit coin is NOT the stock market, There are no bulls ready to set off a massive rally and there are no bears ready to plunge it again. It is simply a few holders with large amounts of coin who decide to buy/sell their coins all at once and people will jump on the trend and the lower it goes the more speculative interest goes right out the window.




I swear to god these boards sound like penny stock boards, you know where the stocks go from $50 to $0.5 and people are still holding because one day it will "return to the good old days"

I love the people throwing out technical analysis(very poor TA btw) and think it relates to bit coin.



hah.. Roll Eyes
zhoutong
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October 21, 2011, 12:45:40 AM
 #38

This is a funny thread.



First of all

Bitcoinica by all measures is a bucketshop, the people playing there are playing against bitcoinica. No matter WHAT they say they are a bucketshop just like a huge majority of forex brokers facing the USA

So people shorting bitcoin over at bitcoinica has no effect on market price.



Moving on,

Bit coin is NOT the stock market, There are no bulls ready to set off a massive rally and there are no bears ready to plunge it again. It is simply a few holders with large amounts of coin who decide to buy/sell their coins all at once and people will jump on the trend and the lower it goes the more speculative interest goes right out the window.




I swear to god these boards sound like penny stock boards, you know where the stocks go from $50 to $0.5 and people are still holding because one day it will "return to the good old days"

I love the people throwing out technical analysis(very poor TA btw) and think it relates to bit coin.



hah.. Roll Eyes

Bitcoinica is not a bucket shop. Our volume at Mt. Gox is over 300,000 BTC for the past 30 days. More than 60% of Bitcoinica trades have been hedged.

I have no incentive to take the risk. We are already making more profits than any exchange from the spreads, it's never wise to trade against Bitcoin traders, who can be assumed to be more open minded than average traders.

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old_engineer
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October 21, 2011, 01:39:37 AM
 #39

Bitcoinica is not a bucket shop. Our volume at Mt. Gox is over 300,000 BTC for the past 30 days. More than 60% of Bitcoinica trades have been hedged.

"As defined by the U.S. Supreme Court a Bucket shop is "[a]n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, on the rise or fall of the prices of stocks, grain, oil, etc., there being no transfer or delivery of the stock or commodities nominally dealt in."(from wikipedia)

If 60% of trades are hedged - ie, the underlying security is transferred - then it's only 40% bucket shop?  I'm no expert, but I think anything over 0%, and you would be considered a bucket shop for regulatory purposes.
old_engineer
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October 21, 2011, 01:50:54 AM
 #40

It looks like short squeezes are in play.  Bitcoin low was $2.05 at one point, and at 5:1 leverage, short squeezes could have started happening at $2.46.  Price now at $2.48 and rising...

I'd love to see one happen just for S&G. 
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