Warning: How many of you Bears have ever been a victim of a Short Squeeze?

[BC-Trader]

I would rather save these commissions and offer lower spreads by taking a little bit of risk. I'm okay with losing money on some transactions while making them back on others.

you said that


And you claim not to trade against your clients?




 

[1714168451]

1714168451

[zhoutong]

I would rather save these commissions and offer lower spreads by taking a little bit of risk. I'm okay with losing money on some transactions while making them back on others.

you said that


And you claim not to trade against your clients?




 

This is not trading against my clients. Zero net position is still maintained because there are always leftovers in our reserves, i.e. we're risking part of our profits in an effort to reduce total transaction cost. There's no net profit from this kind of activity because everything is automated. And pricing algorithm is completely independent.

For example, you have a $1,000 deposit and want to short 200 BTC. In the spot market, we may sell 0% - 100% of the 200 BTC. (Average 40-60%). A small part is reserved for future internal matching. (A short period, depending on volatility.) It's impossible to have another 200 BTC buy order coming up at the same time. So all we can do is reserve a small part of this sell order in the pool. This is where risk comes from.

If there's another sell order coming up in this period, we will just give up and most likely lose a small amount of money on this trade. If a buy order coming up, we can absorb the spreads and make some profits.

We have a system to monitor the status of the pool. Our profits are roughly equal to our losses. There's no algorithm to maximize profit or whatsoever. This is just a way to save transaction cost and offer better spreads a typical exchange.

If we are trading against you, we will look at your stop orders and try to manipulate the price to exactly trigger your stop order and change the price back. This is definitely not we are doing.

But, if you believe that a price-agnostic bot holding unhedged positions for only a few seconds using independent algorithms using its own money is practically a brokerage trading against clients, I have nothing to explain. We're purely generating value for customers, and we don't make a single cent from doing this.

[cypherdoc]

there's nothing like a midnight Squeeze 

[cypherdoc]

liquidate their asses Zhoutong.

[miscreanity]

there's nothing like a midnight Squeeze 

And a nice midnight snack at $3. Refreshing after all the weekend declines.

Waiting for momentum to kick in...

[Cluster2k]

Late afternoon here.  Been watching it and enjoying the show. 

[zhoutong]

there's nothing like a midnight Squeeze 

I'm watching the show.

I don't consider it to be a short squeeze, just a normal fluctuation.

Some short sellers were liquidated, unfortunately.

[Vladimir]

The real short squeeze in bitcoin world will push bitcoin price to 20-30$ or higher even if for short time. Some tiny move from 2.5 to 3 is not a short squeeze at all, even if someone got a margin call. Wait for massive amount of margin calls one causing another and as result a violent parabolic move up. That would be the squeeze. The market is fairly shallow and the squeeze can be huge.

Potentially interesting strategy is to place some sell orders now in 20-30-50 range even if just to ease short's pain. lol.

[S3052]

welcome back Vladimir. I missed you

[miscreanity]

The real short squeeze in bitcoin world will push bitcoin price to 20-30$ or higher even if for short time. Some tiny move from 2.5 to 3 is not a short squeeze at all, even if someone got a margin call. Wait for massive amount of margin calls one causing another and as result a violent parabolic move up. That would be the squeeze. The market is fairly shallow and the squeeze can be huge.

Potentially interesting strategy is to place some sell orders now in 20-30-50 range even if just to ease short's pain. lol.

I think $20-30 from a short squeeze is highly unlikely. Perhaps the $10 range, but even that's just a wild guess. A significant rise like that due to short covering might garner fresh interest from Bitcoin neophytes and trigger more buying support.

Back to selling pressure: it's more likely that either mined BTC or existing BTC that had been purchased post-mining have been sold. How much of the total decline in price has been from short-selling versus normal inflationary debasement attributable to block generation, relative USD (or other currency) strength or other factors? Where other than Bitcoinica is short selling possible?

Without that information, it is virtually impossible to do much more than make an educated guess.

Now that I've got that out of the way: let's kill some shorts, I want to make a profit!

[cypherdoc]

Now that I've got that out of the way: let's kill some shorts, I want to make a profit!

LOL!  coming from you, who's normally quite conservative and measured, this is hilarious!

[cypherdoc]

The real short squeeze in bitcoin world will push bitcoin price to 20-30$ or higher even if for short time. Some tiny move from 2.5 to 3 is not a short squeeze at all, even if someone got a margin call. Wait for massive amount of margin calls one causing another and as result a violent parabolic move up. That would be the squeeze. The market is fairly shallow and the squeeze can be huge.

Potentially interesting strategy is to place some sell orders now in 20-30-50 range even if just to ease short's pain. lol.

what the kid shorts dealing in a penny stock like instrument such as Bitcoin don't realize is that the upside price ramp potential is infinite while the downside profit potential is limited from here to zero.  with all of Bitcoins potential and its inability to be hacked, the bulls have so much more to gain and take perverse joy in killing shorts for blood sport.

it starts off slow, with plenty of downside retraces to lure the shorts back in.  the price ramps are short but vicious destroying small pockets quickly.  Zhoutong will assist greatly in this by liquidating his shorts to protect himself, much to the chagrin and anger of his acct holders.  the shorts that have made lots of money in the past refuse to believe whats happening and imperceptibly don't notice their green balances being whittled away.  arrogance sets in, like this guy Nagle, but pretty soon those green balances turn red.

denial turns to anger turns to arrogance turns to fear turns to capitulation.  the psychology is wonderful to watch.

[N12]

it starts off slow, with plenty of downside retraces to lure the shorts back in.  the price ramps are short but vicious destroying small pockets quickly.  Zhoutong will assist greatly in this by liquidating his shorts to protect himself, much to the chagrin and anger of his acct holders.  the shorts that have made lots of money in the past refuse to believe whats happening and imperceptibly don't notice their green balances being whittled away.  arrogance sets in, like this guy Nagle, but pretty soon those green balances turn red.

denial turns to anger turns to arrogance turns to fear turns to capitulation.  the psychology is wonderful to watch.

Sounds exactly like what we bulls experienced in June, but now even you admit it’s been a bubble?

Anyway, it’s not like I’m not enjoying this. Let’s see if we can reclaim this long-term trendline!

Breaking 3 atm. The last time we broke 3, we went parabolic to 32$.

[johnj]

Yeah, I just saw we touched 3, and a HUGE ask-wall came up, and it's being whittled away

[cypherdoc]

it starts off slow, with plenty of downside retraces to lure the shorts back in.  the price ramps are short but vicious destroying small pockets quickly.  Zhoutong will assist greatly in this by liquidating his shorts to protect himself, much to the chagrin and anger of his acct holders.  the shorts that have made lots of money in the past refuse to believe whats happening and imperceptibly don't notice their green balances being whittled away.  arrogance sets in, like this guy Nagle, but pretty soon those green balances turn red.

denial turns to anger turns to arrogance turns to fear turns to capitulation.  the psychology is wonderful to watch.

Sounds exactly like what we bulls experienced in June, but now even you admit it’s been a bubble?

Anyway, it’s not like I’m not enjoying this. Let’s see if we can reclaim this long-term trendline!

Breaking 3 atm. The last time we broke 3, we went parabolic to 32$.

i don't get what you're saying.  i've never thought its been a bubble which is why i've never sold a Bitcoin, just accumulated on the way down (too soon yes).  but thats ok as i believe the longterm fundamental equilibrium price is way higher than 32.

[N12]

Referring to your OP:

This type of mentality is just as bad as the speculative bubble, only in reverse.

The thing with the downtrend we had since June is that it’s been a slow, sustained bleeding. It reflects the permabullish mentality many here share, always buying back the Bitcoins. I don’t know if this trend is going to be broken; it’ll depend on how big the core of true Bitcoin supporters is.

[cypherdoc]

Referring to your OP:

This type of mentality is just as bad as the speculative bubble, only in reverse.

The thing with the downtrend we had since June is that it’s been a slow, sustained bleeding. It reflects the permabullish mentality many here share, always buying back the Bitcoins. I don’t know if this trend is going to be broken; it’ll depend on how big the core of true Bitcoin supporters is.

it also depends on the number and size of the sellers/shorters.  i think the selling/shorting pressure has dissipated.  theres only so far the price can fall before the fundamentals of Bitcoin reassert themselves and deep down the Bears know it.

[cypherdoc]

Some short sellers were liquidated, unfortunately.

yes, how unfortunate.

[N12]

I agree with you, at some point it simply turns completely irrational. Fundamentally, I believe this point has been reached.

Or perhaps someone might explain to me why people in October, after all publicity we have had, new infrastructure, new businesses, new development (hell, we even have Gavin working fulltime now) etc., should be able to purchase Bitcoins cheaper than the guys in April?

[cypherdoc]

just to reiterate and update Fridays action in the REAL economy of stocks, commods, and bonds which i'm sure most of you here don't follow as closely as i do:

1.  stocks rallied big and broke up and out of a bear flag and look to rally for months.
2.  US Treasury bonds continue to be sold off unleashing HUGES sums of USD's looking for a new home.
3.  commodities like oil, gold, silver, and miners took off as well.
4.  the USD took a big dump meaning leverage has returned to the markets in general.  IOW, speculators are borrowing or shorting USD's to bid up investments of all kinds.

what professionals call this is the return of RISK ON.  which means all speculative investments like Bitcoin go back on the table and are targets of speculative froth.  its not surprising to me that we're seeing this 50% rally right now.  it makes total sense.  if you believe in Bitcoin, you should buy it now b/c there are plenty of others right behind you.  and they don't just come from the smallish Bitcoin community that we have here and that most of you assume are the only players in this space.

that huge bid wall thats following the price up is REAL.