Chooo, chooo! Everyone agrees, it's reversal time! ... except for Bitfinex.

[oda.krell]

It's certainly starting to look a bit more bullish again, doesn't it? There's still uncertainty in the air about how the gox situation will resolve, but that rebound from 400 was beautiful: loads of volume, and remarkably controlled retracement so far. All in all, I think I'm not the only one who looks at the charts and starts wondering if the post-December-ATH bear market is maybe over...


If it weren't for the stats from Bitfinex. This is a view of the past week. 'Total sum of active USD swaps', i.e. people going long on leverage is, well, unimpressive.





No big deal, maybe. But then there's total BTC swaps:





It's a new ATH (at least as far as the website, charts-bfxdata.rhcloud.com, goes back). In other words, traders on Bitfinex are still shorting the hell out of Bitcoin.

I can see two ways this will resolve: Bitfinex reaction is lagging, price continues to climb (which will lead to a lot of headache for those with active shorts), or the shorting traders are onto something, and we're coming down again, hard.

Personally, I can't say exactly which way I'm leaning -- I'm still cautiously optimistic, but the Bitfinex stats certainly put some more doubt into my mind again.

[F-bernanke]

Assuming the Shorters already sold MASSIVE amounts of btc, they have to buy back at some point, but when?

[Dragonkiller]

interesting, thanks for this. hopefully we choo choo and shorters have to cover

edit: what do you think about stamps order book ($24m), i don't think i've ever seen it so high. where did it come from? i don't believe gox traders wanting to buy back could have transferred fiat so quickly. it was around $10m a couple of days ago.

[oda.krell]

Assuming the Shorters already sold MASSIVE amounts of btc, they have to buy back at some point, but when?

Like I said, it's possible it's just a lagging signal. But what really surprises me that, including today, the total BTC swaps are still going *up*. I really don't see that as anything other than finex traders collectively betting against this recovery. We'll see who comes out on top in a few days, I guess.

[F-bernanke]

I think it was Matthecat (edit, or TERA yes) who said this shorting is responsible for the ATH in bidsum at stamp, makes sense.

[oda.krell]

interesting, thanks for this. hopefully we choo choo and shorters have to cover

edit: what do you think about stamps order book ($24m), i don't think i've ever seen it so high. where did it come from? i don't believe gox traders wanting to buy back could have transferred fiat so quickly. it was around $10m a couple of days ago.

I can't explain the big jump we've seen yesterday (or 2 days ago?) either. I read a comment by TERA (EDIT: or matthecat) who in fact linked to the shorting going on on stamp through finex (in the sense that those who sell on stamp through finex will pump USD into stamp), but that still doesn't explain the almost vertical increase, in my opinion.

I'd say the most likely explanation is one of the following two: (a) attempt by a large market participant to "paint the order book", i.e. to give the impression of buying pressure where there is none, or (b), more positively: USD sitting on stamp's account, but not the order book, finally entered the race and got put on the order book.

[Dragonkiller]

Yes I guess that makes sense but you're right, it doesn't explain the vertical jump. I recall there were a couple of big dumps, I think 10k and 5k over the last day or two, perhaps some of that USD is now sitting on the orderbook (either to buy back in cheaper, which I doubt, but is possible) or to manipulate the orderbook.

[gog1]

I went from lender to outright buying coins recently.  I think the money available for USD lending has decreased on the loan book.  Good to see the shorts, buy BTC, appreciate and earn interest at the same time.

[MatTheCat]

I can see two ways this will resolve: Bitfinex reaction is lagging, price continues to climb (which will lead to a lot of headache for those with active shorts), or the shorting traders are onto something, and we're coming down again, hard.

Personally, I can't say exactly which way I'm leaning -- I'm still cautiously optimistic, but the Bitfinex stats certainly put some more doubt into my mind again.

Bear in mind, there is much more potential for getting wiped out altogether with leveraged long positions, than leveraged short positions. Just takes a flash crash/mega dump to totally annihilate leveraged long positions, but an insane level of buying power to rush into market completely insensitive to price to wipe out total short capital.

In a market like Bitcoin, punctuated with sudden whale dumps, long with leverage isn't very clever. Shorting is always going to be more popular, regardless.

[af_newbie]

I don't see any reversal until 720-750+

It is going to push to upper trend line if it can, but overall the channel is down unless we jump another $150 on stamp.

[Mythul]

I wonder if we will break the ATH. Bitcoin please go to 900+ so I can recover my losses 

[af_newbie]

I wonder if we will break the ATH. Bitcoin please go to 900+ so I can recover my losses 

You and countless others.  $800-$1000 range will be huge resistance as most folks (in red now) will be getting out

[dave3k]

I wonder if we will break the ATH. Bitcoin please go to 900+ so I can recover my losses 

You and countless others.  $800-$1000 range will be huge resistance as most folks (in red now) will be getting out

Yeah, to break that kind of resistance will take a big charge, a slow rise will not be able to break through imho.

With the right momentum a lot of people will break out of the red and then think, I'll wait for the next high before selling, from now on its all profit!

[cbutters]

the past few hours... the Choo, choo needs more choo 

[MatTheCat]

the past few hours... the Choo, choo needs more choo 

Memory of much higher prices from like just a few days ago are still very much in the mind, so there is reluctance to sell and/or take profits.

On the otherhand, only a minority of people are going to be willing to take risk of $610 top being taken out after an already 85% recovery from bottom....

......could play out in this range for a while before long traders get impatient and decide to take profits...or until shorters get bolder and bolder.

[oda.krell]

I wonder if we will break the ATH. Bitcoin please go to 900+ so I can recover my losses 

You and countless others.  $800-$1000 range will be huge resistance as most folks (in red now) will be getting out

Yeah, to break that kind of resistance will take a big charge, a slow rise will not be able to break through imho.

With the right momentum a lot of people will break out of the red and then think, I'll wait for the next high before selling, from now on its all profit!

I beg to disagree. THat's exactly what everyone claimed post-260 ATH, that it'd take several attempts to break it, selling pressure all the way up, yadda yadda. In reality, the hard bit was going up from ~60+ (July) to 130 (end of September), then shaking off the SR crash. Everything afterwards was just one smooth ride, and the previous ATH wasn't even any serious battle anymore (3 days were spent around it, then: done). Sure, we had Chinese help, but I'm just saying that breaking the previous high isn't such a huge deal if the buying pressure is there. (which, admittedly, is still lacking right now)

[oda.krell]

I can see two ways this will resolve: Bitfinex reaction is lagging, price continues to climb (which will lead to a lot of headache for those with active shorts), or the shorting traders are onto something, and we're coming down again, hard.

Personally, I can't say exactly which way I'm leaning -- I'm still cautiously optimistic, but the Bitfinex stats certainly put some more doubt into my mind again.

Bear in mind, there is much more potential for getting wiped out altogether with leveraged long positions, than leveraged short positions. Just takes a flash crash/mega dump to totally annihilate leveraged long positions, but an insane level of buying power to rush into market completely insensitive to price to wipe out total short capital.

In a market like Bitcoin, punctuated with sudden whale dumps, long with leverage isn't very clever. Shorting is always going to be more popular, regardless.

This doesn't make much sense. It depends on how long you can avoid margin calls, but the overall trend would definitely favor going long on leverage. But I agree, if you trade near your limits, you can easily be wiped out in a single flash crash.

But anyway, even if shorting is the natural inclination in BTC, it still doesn't explain the divergence I point out, that the rest of the markets are starting to look a bit more bullish again, while shorting increases. Like I said, in the end I guess it's a bet by finex traders against the recovery, but it wouldn't be the first time that their opposition is simply wiped away by the rest of the markets (think the last that happened was in October last year)

[thezerg]

Assuming the Shorters already sold MASSIVE amounts of btc, they have to buy back at some point, but when?

Like I said, it's possible it's just a lagging signal. But what really surprises me that, including today, the total BTC swaps are still going *up*. I really don't see that as anything other than finex traders collectively betting against this recovery. We'll see who comes out on top in a few days, I guess.

it takes 2 to tango...

(buy coin, lend it to short sellers to hold the price down, buy more coin)

[Hfertig]

I can see two ways this will resolve: Bitfinex reaction is lagging, price continues to climb (which will lead to a lot of headache for those with active shorts), or the shorting traders are onto something, and we're coming down again, hard.

Personally, I can't say exactly which way I'm leaning -- I'm still cautiously optimistic, but the Bitfinex stats certainly put some more doubt into my mind again.

Bear in mind, there is much more potential for getting wiped out altogether with leveraged long positions, than leveraged short positions. Just takes a flash crash/mega dump to totally annihilate leveraged long positions, but an insane level of buying power to rush into market completely insensitive to price to wipe out total short capital.

In a market like Bitcoin, punctuated with sudden whale dumps, long with leverage isn't very clever. Shorting is always going to be more popular, regardless.

This doesn't make much sense. It depends on how long you can avoid margin calls, but the overall trend would definitely favor going long on leverage. But I agree, if you trade near your limits, you can easily be wiped out in a single flash crash.

But anyway, even if shorting is the natural inclination in BTC, it still doesn't explain the divergence I point out, that the rest of the markets are starting to look a bit more bullish again, while shorting increases. Like I said, in the end I guess it's a bet by finex traders against the recovery, but it wouldn't be the first time that their opposition is simply wiped away by the rest of the markets (think the last that happened was in October last year)

I think it makes perfect sense. The current trend is a downtrend, even if the overall trend is up. The market has rallied 50% within less than 48 hours. Tell me a better time to short....

[gog1]

Somehow, for all the accusation of fake trades on Huobi and OKCoin, I think the Chinese sets the market to some extent, prices never truly crash in China during this saga, it's a slow decline, which makes me quite confident buying in in the 400's & low 500's.  Worst case, I can dump it in China and have ways to get the CNY out.  But now China's prices are lagging bitstamp, which could mean we are in for a pause.  The amount of speculative money and firepower there is beyond our imagination!