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

[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)

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....

Good point. Short-term bets on a retracement piling up on top of the shorts betting on the overall downtrend. That'd explain the last day or two of increase in the graph I posted.

[metstijl]

choo chooo,
reminds me of this ^^
https://www.youtube.com/watch?v=QQunKPD3uVk 18+

[spiderbrain]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

[windjc]

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....

Good point. Short-term bets on a retracement piling up on top of the shorts betting on the overall downtrend. That'd explain the last day or two of increase in the graph I posted.

Oda, I love your analysis almost everytime. However, this snap back seems so obvious to me. We have 6 down weeks in a row - which may have been a record, I am not sure. The Gox tumor has been for the most part been removed from the bitcoin world, albeit not 100% yet. Meanwhile there were both a ton of shorts and a ton of people looking to buy in in the 400s. 

All this seems to suggest a significant and sustained rally - at least for a week or more and probably at least up into the 700s or the higher down trend line (Jan 5th-Feb 6th) before it broke down into the lower down trendline.

So, that is my first point - that there shouldn't be any surprise on the fact that the rally could sustain for a while.

But my 2nd point is, it seems just as possible that after this rally takes us where it is going, that we will be looking at the overall downtrend to continue to retest potentially the 400s again or AT LEAST the 200 sma. I just cannot imagine that we do not retest that support again at some point before entering a new bull market.

I could be wrong about all this, but I just wanted to say I am a little surprised that some people (ie TERA who did a wonderful job calling the bottom) are surprised that this rally has legs.

[TERA]

Short interest is a GOOD THING if you're looking to take a long. It means there is a lot of potential energy, the coil is loaded down, and when traders close their positions, it will result in UPWARDS movement.

[windjc]

Short interest is a GOOD THING if you're looking to take a long. It means there is a lot of potential energy, the coil is loaded down, and when traders close their positions, it will result in UPWARDS movement.

Exactly. That's one reason why I think this rally has legs. In fact, if we don't get to 700s down trend line and only remain in the current one, then this is even more bearish, imo.

[TERA]

Short interest is a GOOD THING if you're looking to take a long. It means there is a lot of potential energy, the coil is loaded down, and when traders close their positions, it will result in UPWARDS movement.

Exactly. That's one reason why I think this rally has legs. In fact, if we don't get to 700s down trend line and only remain in the current one, then this is even more bearish, imo.

On the other hand, I think the move from 400 to 600 is WAY overbought and is not trading like any previous bitcoin recovery. There should be a good conslidation back to around 500 before the next leg up. That would not be bearish. There might be a lot of consolidation in the 500s and 600s before getting to the 700s because if you go to a 3 day chart, there are EMAs at 625 and 670. Those are major resistances. When those break, all hell breaks loose, and the next trading area will probably be in the 800s. This will be like the 140 in August. Now if 2 months go by and the 3 day chart is still not reversed, then yes that is bearish.

[windjc]

Short interest is a GOOD THING if you're looking to take a long. It means there is a lot of potential energy, the coil is loaded down, and when traders close their positions, it will result in UPWARDS movement.

Exactly. That's one reason why I think this rally has legs. In fact, if we don't get to 700s down trend line and only remain in the current one, then this is even more bearish, imo.

On the other hand, I think the move from 400 to 600 is WAY overbought and is not trading like any previous bitcoin recovery. There should be a good conslidation back to around 500 before the next leg up. That would not be bearish. There might be a lot of consolidation in the 500s and 600s before getting to the 700s because if you go to a 3 day chart, there are EMAs at 625 and 670. Those are major resistances. When those break, all hell breaks loose, and the next trading area will probably be in the 800s. This will be like the 140 in August. If months go by and the 3 day chart is still not reversed, then yes that bearish.

Unless we are in a longer bear trend. I do agree that either way we should see the 200 EMA at least one more time.

I expect some pressure once SecondMarket allows investors to take profit at the end of March.

[oda.krell]

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

re: "this rally has legs"... that's exactly what I'm doubting, and as much as shorts can be seen as a "load down coil", it can also be the suppressor that keeps it down. I would have really liked to see us go through 620 on decent volume, but neither are we near that price, nor did volume keep up. Maybe it's a resting state after being overbought, but right now, I'm as skeptical as I was on the 23rd (i.e. when we were at 640/650, before dropping back to 400). Not saying that'll happen again, but like I said: my sentiment is short&mid term bearish, and it takes some more to convince me we're turning around this time.

[MatTheCat]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

[oda.krell]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

[TERA]

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

re: "this rally has legs"... that's exactly what I'm doubting, and as much as shorts can be seen as a "load down coil", it can also be the suppressor that keeps it down. I would have really liked to see us go through 620 on decent volume, but neither are we near that price, nor did volume keep up. Maybe it's a resting state after being overbought, but right now, I'm as skeptical as I was on the 23rd (i.e. when we were at 640/650, before dropping back to 400). Not saying that'll happen again, but like I said: my sentiment is short&mid term bearish, and it takes some more to convince me we're turning around this time.

You were expecting to go through 620 right away? You need a 60%+ rally, and the 53% rally wasn't good enough for you? Keep in mind most btc recoveries only rally 20% on the first leg...

Also can you explain the "supression" effect. How do shorts continue to prevent the price from going up on an ongoing basis? Even if it did, I still think that's a good thing to have on your side when you're opening a long. The opposite would be when everyone else is leveraged long, and they are all waiting for a point to sell... Or do you consider that these longs magically cause on ongoing rally also?

[MatTheCat]

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

Yeah....2hr charts are in no-mans land but with 4 hr charts looming bearishly above. This probs means extended stagnation period before a gradual grind down to find a support level as opposed to the kind of sharp moves that we have witnessed recently.

btw, where are you getting the information on the swap deals from Bitfinex. This is information that I would prove of use to me.

You were expecting to go through 620 right away? You need a 60%+ rally, and the 53% rally wasn't good enough for you? Keep in mind most btc recoveries only rally 20% on the first leg...

Also can you explain the "supression" effect. How do shorts continue to prevent the price from going up on an ongoing basis? Even if it did, I still think that's a good thing to have on your side when you're opening a long. The opposite would be when everyone else is leveraged long, and they are all waiting for a point to sell... Or do you consider that these longs magically cause on ongoing rally also?

$646 - $400

$400 - $610

I make that an 85% recovery.

[Miz4r]

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Price just hit 598.87.. bulls are going for another attempt at breaking through 600. I think there must be so many shorts going on right now that if they get squeezed out by a few whales we might just ramp up to $800 in one go lol.

[oda.krell]

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

re: "this rally has legs"... that's exactly what I'm doubting, and as much as shorts can be seen as a "load down coil", it can also be the suppressor that keeps it down. I would have really liked to see us go through 620 on decent volume, but neither are we near that price, nor did volume keep up. Maybe it's a resting state after being overbought, but right now, I'm as skeptical as I was on the 23rd (i.e. when we were at 640/650, before dropping back to 400). Not saying that'll happen again, but like I said: my sentiment is short&mid term bearish, and it takes some more to convince me we're turning around this time.

You were expecting to go through 620 right away? You need a 60%+ rally, and the 53% rally wasn't good enough for you? Keep in mind most btc recoveries only rally 20% on the first leg...

Also can you explain the "supression" effect. How do shorts continue to prevent the price from going up on an ongoing basis? Even if it did, I still think that's a good thing to have on your side when you're opening a long. The opposite would be when everyone else is leveraged long, and they are all waiting for a point to sell... Or do you consider that these longs magically cause on ongoing rally also?

Because, as I said above, the biggest surprise to me wasn't that shorts were at an ATH, but they were *rising*. Shorts being piled on top of even more shorts... there is no "magic" going on at all, I'm just looking for information that diverges from the prevalent expectations. A trend of traders increasing their leveraged short positions is such information. I really think any secondary interpretations ("would you rather have them being long already") are, well, secondary. A massive, *increasing* short wall is not, in any reasonable interpretation, a bullish signal.

That said, I've also mentioned right from the beginning, that finex shorters have been burned badly before, when their collective bet against an uptrend was simply trampled down. There's enough evidence for that in the end of last year (autum, before the last leg of the rally leading to December ATH)

[oda.krell]

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

Yeah....2hr charts are in no-mans land but with 4 hr charts looming bearishly above. This probs means extended stagnation period before a gradual grind down to find a support level as opposed to the kind of sharp moves that we have witnessed recently.

btw, where are you getting the information on the swap deals from Bitfinex. This is information that I would prove of use to me.

You were expecting to go through 620 right away? You need a 60%+ rally, and the 53% rally wasn't good enough for you? Keep in mind most btc recoveries only rally 20% on the first leg...

Also can you explain the "supression" effect. How do shorts continue to prevent the price from going up on an ongoing basis? Even if it did, I still think that's a good thing to have on your side when you're opening a long. The opposite would be when everyone else is leveraged long, and they are all waiting for a point to sell... Or do you consider that these longs magically cause on ongoing rally also?

$646 - $400

$400 - $610

I make that an 85% recovery.

http://charts-bfxdata.rhcloud.com/

Select BTC or USD as unit at the top menu, to see totals of either.

[oda.krell]

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Price just hit 598.87.. bulls are going for another attempt at breaking through 600. I think there must be so many shorts going on right now that if they get squeezed out by a few whales we might just ramp up to $800 in one go lol.

And that's why it's probably a bad idea to ever let your leveraged position "sitting" for longer than a few hours. Don't know what's the technical term is for that...

What I mean is, I can see how leveraged trading makes sense during, and I really mean: right during a violent swing. But I simply can't ever imagine placing the same bet *and then walking away from the computer*. But maybe more skilled traders know what they're doing...

[windjc]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

Oda, I am confused by your post.

First, why do you predict a possible retracement to the 300 SMA? We haven't been that low since 2012 when we were flatlined for(ever).  The silk road crash didnt even touch the 300.

Also, I have the 200 at around 475 and the 300 around 360. Not sure where you are getting your #s from for these moving averages.

[oda.krell]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

Oda, I am confused by your post.

First, why do you predict a possible retracement to the 300 SMA? We haven't been that low since 2012 when we were flatlined for(ever).  The silk road crash didnt even touch the 300.

Also, I have the 200 at around 475 and the 300 around 360. Not sure where you are getting your #s from for these moving averages.

Your answer is: I'm talking about EMAs :D

I never use SMA, don't trust them. When you guys talk about touching the SMA200 again, I tend to translate it in my head to an EMA300. Not exactly equivalent, but I have more faith in it.

[windjc]

I suspect that some rich people that lost a little play money on gox have realised they'll need to buy in again ASAP while the price is still supressed from the gox panic.

Yes. Because if you had just been totally burned investing in what you always knew was a high risk asset, you would be chomping at the bit to get yet more millions into the same asset on another potentially high risk exchange.

That is totally how human psychology works!

Maybe the bear mood finally got me, but I wouldn't be surprised if we end up not only at the daily EMA200, but the 300 again.

Never bet against the 4Hr indictators. They are all maxed, and looking to head back down the way. We may get a slight rise, trend further, a slight dip followed by another slight rise. But shorting right now has got to be a good bet, at least until lower $500s and probably a bit more......lets face it, hardly a good news week.

Short right now at $588. Chance are this will be within $1-$3 of the best short price on offer today.

Huh? How am I betting against 4hr indicators? TERA and windjc were mentioning revisiting the 200 day EMA at around 530, and I simply said I can even see us going back to the 300 day EMA (at around 430 right now). Not today, not tomorrow, but as part of a continued dragged out capitulation.

That said, I'm also looking at the 2h view with a BB, and I can see a slightly more positive scenario: According to that interpretation, we saw the overbought state we were in in the last 24h resolve in an *extremely* controlled fashion, and we can now actually expect another small bounce up. This *does* mean price shouldn't go below 545/550 in the next 24 hours, otherwise, the pattern I see is broken. If however we *do* go above 600 again in the next 24h and stay there, it'd be a pretty good sign... in the sense that we're working out way up, staying the upper half of the BB, with the necessary retracements only briefly touching the lower BB bounds.

Oda, I am confused by your post.

First, why do you predict a possible retracement to the 300 SMA? We haven't been that low since 2012 when we were flatlined for(ever).  The silk road crash didnt even touch the 300.

Also, I have the 200 at around 475 and the 300 around 360. Not sure where you are getting your #s from for these moving averages.

Your answer is: I'm talking about EMAs

I never use SMA, don't trust them. When you guys talk about touching the SMA200 again, I tend to translate it in my head to an EMA300. Not exactly equivalent, but I have more faith in it.

Why more faith in EMA than SMA?