Some Bearish Observations.

[MatTheCat]

I am out of my Bitcoin position for now, although I am not sure that I would go as far as to declare myself intermediate bearish as of yet. However, here are some observations that I have made.

The first is well documented. It is the maxed out state of Bitfinex leveraged longs. As can be seen, we hit an ATH at around 24 million USD being loaned out to leveraged longs. At the start of the ramp up, as you can see, their was around 16 million USD on loan to leveraged Bitcoin traders on Bitfinex. An increase of around 8 million, accounts for some 15K BTC being held in long positions, whilst paying fairly high rates of interest out on a daily basis. We can see that since the $683 top on June 2nd, the level of USD swaps as generally continued to rise, although the BTC price has not.






The screenshot below shows the current downward resistance trendline of the 'bullish' pennant formation we are currently in:



I recommend that you all get over to Bitcoinwisdom (or indeed Trading view, no matter) and draw this line on the chart for yourselves. Once you have done that zoom out the chart a bit and see what other points it connects with.

Once you have done that, you will see that this line is a perfect fit with the Nov 30th, and the Dec 4th ATHs!

So. We have a maxed out leveraged situation on Bitfinex, the maxing out of which has no doubt greatly contributed to the recent Bitcoin ramp (the increase accounts for ~15K BTC, not of volume, but being held in long positions), and has also continued to increase for the past week (up until today), although the Bitcoin price has decreased and we have pennant downtrend that just happens to also be a tangent to both points of the double top at the end of 2013!

Hmmm....  

Even if there is still big money sitting on sidelines looking to take large Bitcoin positions at this point in time, they will take one look at this leveraged long situation and rubbing their hands with glee at thought of how much they could lower their entry points into the market by squeezing these longs who must fold their hands if the market does not rise and even more so if the market starts turning against them. Furthermore, no large quantity of capital is going to enter the market at these prices when their is so much margin trade hanging around looking to cash out for profits. After all, that is what margin traders do. Cash out, as opposed to buying a big bunch of an asset, storing it away and forgetting about it.

[bitcoinsrus]

If I understood better about bitfinex, I would bet that it would go higher (in the up coming weeks).
You do bring some legit observations about the bearish issue (and I did expect 700 for this week already since it hit 680 last week).

Its barely getting 650. Lets see what happens mid to end week.

[MatTheCat]

If I understood better about bitfinex, I would bet that it would go higher (in the up coming weeks).
You do bring some legit observations about the bearish issue (and I did expect 700 for this week already since it hit 680 last week).

Its barely getting 650. Lets see what happens mid to end week.

Market is feeling rather heavy. That is why I exited my position at small loss.....for the nth time in the past phucking week, thus largely devouring the profits I made on the way up (again, less than half of what I could have made if I wasn't a shit trader)

[NewWorldBitOrder]

If I understood better about bitfinex, I would bet that it would go higher (in the up coming weeks).
You do bring some legit observations about the bearish issue (and I did expect 700 for this week already since it hit 680 last week).

Its barely getting 650. Lets see what happens mid to end week.

Market is feeling rather heavy. That is why I exited my position at small loss.....for the nth time in the past phucking week, thus largely devouring the profits I made on the way up (again, less than half of what I could have made if I wasn't a shit trader)

Houbi and Stamp lead. So Bitfinex being over extended is not a market mover ,IMO.

Plus I still can't wrap my head around the fact that Finex never has less than 15 million in longs at crazy interest rates. It has never made sense to me.

[MatTheCat]

Houbi and Stamp lead. So Bitfinex being over extended is not a market mover ,IMO.

Plus I still can't wrap my head around the fact that Finex never has less than 15 million in longs at crazy interest rates. It has never made sense to me.

So you will have noticed how Bitfinex seemed to want to take off earlier, Huobi seemed to follow, but how Bistamp (no leverage and 100% real volume) stayed put?

Bitfinex do also have a system in place for routing trades through Bitstamp.....so pretty weird how they never bit into Bitstamps Ask wall, but instead let traders ramp up the price on their own thin books.......but then, Bitfinex are crooks, and that was probably just a spot of friendly exchange insider short stop loss farming.

15K BTC held in leveraged long positions undeniably has an effect on the market, no matter what exchange it is on so long as lines of inter exchange arbitrage are open to someone,

[Benjig]

The price is tanking a little, if it falls it will go not below than 600, and then probably next weekend we will have the 700s

[BusyBeaverHP]

Hmm... time to sell?

[CEG5952]

If I understood better about bitfinex, I would bet that it would go higher (in the up coming weeks).
You do bring some legit observations about the bearish issue (and I did expect 700 for this week already since it hit 680 last week).

Its barely getting 650. Lets see what happens mid to end week.

Market is feeling rather heavy. That is why I exited my position at small loss.....for the nth time in the past phucking week, thus largely devouring the profits I made on the way up (again, less than half of what I could have made if I wasn't a shit trader)

I very much agree with your position on leveraged longs. ATH in longs, at this price level and movement, and considering (from my amateur observation of BFX and Stamp on Wisdom) much of this rise on Stamp was push up by BFX market buys....makes me nervous. I still see some people mentioning "short squeeze" here and there. I think the shorts have been squeezed. And if the bullish momentum doesn't start soon, these longs risk feeling the squeeze. (And the books are scary thin for the amount of longs too)

[PYaEe]

It seems to me that all of you, guys, are not aware of this: "Total sum of active swaps"=!"Total sum of active leveraged positions". You can take the swap, keep it and not use it in a trade, and THERE ARE people who actually doing so (for example, they find it profitable to keep cheap swap for the long time being ready to trade when the time comes, instead of taking expensive swap at the time of trade). There are 22,8 MUsd active swaps on bitfinex now, which is equal to 35 kBTC at current price, and 4400 active BTC swaps, which is 8 times less. But indicator here https://www.bitfinex.com/pages/stats shows us that long positions are only about less then twice of short positions.

[Dragonkiller]

You're almost as good as Veronica 

[Tzupy]

I find the similarity with the first days of February interesting.

[Miz4r]

You're playing with fire Mat.. you know you're a shit trader but you're still trying to trade? That spells trouble. You should have kept those coins in cold storage like you first intended to do. Maybe people have been wanting USD on Bitfinex to be prepared for an expected breakout to the upside soon and haven't actually taken their leveraged long position yet? You don't know how much of those $8M increase in USD swaps are actually stuck in leveraged longs right now. Anyway I wouldn't base my entire analysis and position on what's happening on Bitfinex, and I doubt the manipulating whales you fear so much do either. Perhaps they were just waiting for you to close your longs because they see your posts here and like to laugh at you foaming at the mouth when the price doesn't go your way.

[Dalmar]

Another bearish observation is that btc-e is still adhering to a descending triangle:



Perhaps the manipulators decided to fool people by breaking it on bitstamp and china, but keeping it on btc-e.  

[oda.krell]

Good luck, mate. Set an alarm for the night if you can, in case there's a sudden swing upwards, and if the drop you're expecting happens, don't get too greedy. Take a look at likely fib levels, maybe daily BB, and take a profit in BTC if you get the chance.

Maybe more principally, make up your mind what kind of trading you want to do: trading for (moderate) USD gains, and securing them as soon as possible? Then selling now probably wasn't a terrible choice actually. Or trying to maximize your profits over a longer period? Then I think you need to get used to letting profits ride a bit longer. But fuck this, don't know why I'm lecturing. You seem to know what you're doing, by and large.

[Miz4r]

Maybe more principally, make up your mind what kind of trading you want to do: trading for (moderate) USD gains, and securing them as soon as possible? Then selling now probably wasn't a terrible choice actually.

He bought those coins at $660, so he cemented a net loss. I think it's always a terrible choice to start trading again when you know and admit to yourself you are completely crap at it. It just makes no sense to me at all. Considering Mat wasn't even able to hold his coins in cold storage for a week I doubt he will be able to when he gets lucky to get in lower. Something will happen to shake him out of his position again, you can pretty much bet on it.

[piramida]

Considering Mat wasn't even able to hold his coins in cold storage for a week I doubt he will be able to when he gets lucky to get in lower. Something will happen to shake him out of his position again, you can pretty much bet on it.

Yep many small losses, many small gains, and lots of nerve cells later he'll come out where he started, in usd terms, if lucky, and the question is why even bother?

[Ibian]

Learn to cuss properly mat. And stop throwing money at something you are terrible at. If you can't trade and can't even hold you are better off getting out completely. I suspect you would actually enjoy having another sob story to tell in a few years.

[oda.krell]

Maybe more principally, make up your mind what kind of trading you want to do: trading for (moderate) USD gains, and securing them as soon as possible? Then selling now probably wasn't a terrible choice actually.

He bought those coins at $660, so he cemented a net loss. I think it's always a terrible choice to start trading again when you know and admit to yourself you are completely crap at it. It just makes no sense to me at all. Considering Mat wasn't even able to hold his coins in cold storage for a week I doubt he will be able to when he gets lucky to get in lower. Something will happen to shake him out of his position again, you can pretty much bet on it.

I just meant that, right this moment, I see a slightly higher chance for a price drop than for a price increase, though I believe the upside potential to be a lot higher than the downside potential, so I'm personally not tempted to sell. So in that sense, if he'd be disciplined enough to trade like that, it might make sense to be in fiat now to make a quick buck during a drop. But agreed on the rest. Mat kind of seems to have some decent intuition for the market. He just completely lacks trading discipline and emotional control, from what I can tell.

[T.Stuart]

It is perfectly reasonable to think that we will falter at this point. Past patterns also point to this. It's just a question of how much before the return upwards.

For what it's worth, Mat, from one shit trader to another, I've been experimenting with leveraged longs and also closed my position last night at a loss, although I have a small overall net profit so far since the start of this uptrend.

[MatTheCat]

I very much agree with your position on leveraged longs. ATH in longs, at this price level and movement, and considering (from my amateur observation of BFX and Stamp on Wisdom) much of this rise on Stamp was push up by BFX market buys....makes me nervous. I still see some people mentioning "short squeeze" here and there. I think the shorts have been squeezed. And if the bullish momentum doesn't start soon, these longs risk feeling the squeeze. (And the books are scary thin for the amount of longs too)

I notice also that during the night (for me) or rather the very early morning, that both Huobi and Bitfinex broke to the upside on strong volume. But Bitstamp, didn't get out the $650s. The break out on Bitfinex coincides with yet further ATHs on the USD swap rates....could of course be yet more short stop loss farming by the rats who operate the exchange with access to the required inside information.

As I said before, Bitfinex wants to go up, Huobi wants to go up. But Bitstamp just will not budge which means that the market will not budge. Peculiar.

Mat kind of seems to have some decent intuition for the market. He just completely lacks trading discipline and emotional control, from what I can tell.

and I resolved to wait on getting some kind of strong intuitive feel on the market before exiting my position.....but too many 'facts' were staring me in the face to ignore and I have to let logic thinking guide my decisions to some extent. So I decided to cement some losses. I got up this morning and saw Bitcoin $10 higher than what I sold at (on Stamp), which seems to be as high as it is getting for now.....pffft....I really don't know what is coming next......forces at work operating through Huobi and Bitfinex that definitely want market to go higher, but forces at work on Stamp aint having it. Why is this? Because Huobi and Bitfinex both do leverage and probably also completely fake volume and Stamp does not? If there are whales on the other exchange gladly willing to bid Bitcoin up on other exchanges why aren't they also doing it on Stamp? Could it just be insider short stop loss farming or something even more nefarious?