USD Swap demand on Bitfinex has never been so high

[nick32768]

Currently there are 11.8 Million dollar of USD swap demand, and only 1.1 Million of offers.

http://www.bfxdata.com/

Is this bad or good ?

Nick.

[Icardi09]

what is USD Swap anyways?
is bitfinex an exchange, right?
swap USD <--> BTC ?

[TERA]

It's bearish. The amount of money loaned out to take longs is now at an all time high meaning prices have been supported on fake money. Now the supply of real money to lend out has dried up which results in the supply/demand you mentioned. This is going to cause interest rates to rise. The higher interest rates will force people to dump as it is no longer profitable to hold with the way the trend currently is. This could end up turning into a cascade of stop losses and margin calls as 40,000BTC purchased with loaned money are dumped.

[Smack That Ace]

Thankyou for the explanation TERA.
Technically the market was supported on a bubble that will burst if no more money is put in and this will make the price fall?

Correct ?

Duke

[TERA]

Thankyou for the explanation TERA.
Technically the market was supported on a bubble that will burst if no more money is put in and this will make the price fall?

Correct ?

Duke

I'm not really sure. There may have been some offline block purchasing also.

[nick32768]

It's bearish. The amount of money loaned out to take longs is now at an all time high meaning prices have been supported on fake money. Now the supply of real money to lend out has dried up which results in the supply/demand you mentioned. This is going to cause interest rates to rise. The higher interest rates will force people to dump as it is no longer profitable to hold with the way the trend currently is. This could end up turning into a cascade of stop losses and margin calls as 40,000BTC purchased with loaned money are dumped.

I use bitfinex mainly to lend money, in the last two weeks interest rates grew hi and I was able to gain up to 0.32% daily... this is good news for me   

Nick.

[Tzupy]

TERA, is it possible to guesstimate when the (mass?) forced closure of longs will happen?
I believe that the market still has about a week of consolidation before deciding on major direction.
BFX could be the market leader, in a bearish way, ultimately meaning it could trigger capitulation.

[Miz4r]

Currently there are 11.8 Million dollar of USD swap demand, and only 1.1 Million of offers.

http://www.bfxdata.com/

Is this bad or good ?

Nick.

It just means people are generally bullish and think the price is going to rise again soon so the demand to borrow USD and find a good spot to go long is very high. The opposite happened when we fell from 800 to 340. The demand to borrow BTC was at an all time high back then and people were generally bearish. Of course this can't go on forever and at some point the tide will turn again but this fact tells us nothing when this is going to happen so this is neither bullish or bearish.

[TERA]

TERA, is it possible to guesstimate when the (mass?) forced closure of longs will happen?
I believe that the market still has about a week of consolidation before deciding on major direction.
BFX could be the market leader, in a bearish way, ultimately meaning it could trigger capitulation.

When we were at $680 I originally predicted a drop to $560 followed by a month of consolidation at $600 before picking direction. Of course everyone laughed at me then, called me an uberbear and thought that was ridiculous and impossible. Instead it turned out even worse than I predicted. It dropped to $537 ($522 on finex) and its been about a week of consolidation but 600 cant seem to hold. I'm not sure what will happen. I still think the trendline will be somewhat tough to break. It might be like the premtgox action at $800. Who knows. Also the longs probably wont all be dumped at once - many will hold for bounces in the 400s.

[TERA]

Pre-gox failure there was this other trendline that broke and 1 day MACD went down but we didn't start crashing right away. Instead the bulls were stubborn and held the fib line at 800 for a month. Longs went to an all time high until they were finally dumped in February - bfx data confirms.

We have a similar situation now but with a bigger trendline and with the 3 day MACD instead of the 1 day MACD and longs are at an all time high. Once the trendline breaks and the 3 day MACD goes down the longs might still hold the 550 fib for a month before they dump.





It has to be clear that the trendline is broken; not just that it's being tested.

[ShroomsKit]

Thankyou for the explanation TERA.
Technically the market was supported on a bubble that will burst if no more money is put in and this will make the price fall?

Correct ?

Duke

Hello, please never ever take advice from trolls like Tera. She is known here for her doom predictions. Basically all she does on this forum is telling people we will go down. Just like she did with you.
She will manage to turn ANY situation into something bearish. It's beyond pathetic but that's the life of bear trolls.

[blatchcorn]

Thankyou for the explanation TERA.
Technically the market was supported on a bubble that will burst if no more money is put in and this will make the price fall?

Correct ?

Duke

Hello, please never ever take advice from trolls like Tera. She is known here for her doom predictions. Basically all she does on this forum is telling people we will go down. Just like she did with you.
She will manage to turn ANY situation into something bearish. It's beyond pathetic but that's the life of bear trolls.

The only difference between tera and fonzie/falling is that tera includes charts.  She is a very good troll

[Miz4r]

Tera knows how to subtly instill fear and doubt in people, I think he secretly likes it. I am convinced he's not a she though, another way he's got you all wrapped up into his enigmatic appearance.

[gentlemand]

Tera knows how to subtly instill fear and doubt in people, I think he secretly likes it. I am convinced he's not a she though, another way he's got you all wrapped up into his enigmatic appearance.

No idea where this he/she stuff came from in the first place. Did he make subtle inferences to timing the markets to his menstruation cycle?

Anyway, it has been ignored for quite some time. I'm interested in untainted opinions. Anyone who constantly peddles the same, tired angle regardless of what's happening isn't worth my time.

[TERA]

I just point out TA, patterns, and fractals. No agenda. If technicals were more bullish, my charts would be too. KEep in mind also they are not predictions but possibilities. There is a possibility also of a rally, if the right events develop.

[Hyena]

The lending part is pretty interesting concept. Of course there are a lot of people by now who think that they should borrow money to buy bitcoins. Now they are waiting to break even and the only way for them to default would be a longer than expected consolidation. The lenders must feel uncertainty and fear before they turn successful, otherwise it would be too easy.

A whale who knows that a lot of bitcoins have been bought with borrowed money will keep the prices down until the lenders are under water and forced to start paying back the loans. When lenders have turned unsuccessful a new rally begins as it is now profitable for the whales.

[thezerg]

I just point out TA, patterns, and fractals. No agenda. If technicals were more bullish, my charts would be too. KEep in mind also they are not predictions but possibilities. There is a possibility also of a rally, if the right events develop.

Tera just to point out your bias, notice that you did not respond to the piece of data that the OP highlighted and do not seem to be aware of that.  Your comments refer to the fact that a lot of USD has been borrowed on bitfinex ($25M).  However the OP was talking about the DEMAND for borrowing, which also looks like it is quite high ($12M).  A high borrowing DEMAND is clearly bullish, whereas a high borrowed amount is open to interpretation.  Its bearish because as you have pointed out at some point these positions need to be unwound which could put a lot of coins on the market, assuming the borrowing was used to purchase coins -- bullish if you believe in the wisdom of the crowds.

[Miz4r]

I just point out TA, patterns, and fractals. No agenda. If technicals were more bullish, my charts would be too. KEep in mind also they are not predictions but possibilities. There is a possibility also of a rally, if the right events develop.

You often stress the bearish possibilities and ignore the bullish ones or mention them very briefly as if unimportant. Also you say the demand for USD loans is a bearish indication which is false and you should know that. The current technicals aren't bearish at all, just because the recent correction went a bit deeper than you initially thought (disregarding Chinese exchanges) doesn't mean the entire uptrend from $340 is over now. We saw the same pattern after the initial spike from $340 to $548. I can even see bullish divergences forming on the shorter timeframes, so your bearishness looks all in all very biased and one-sided to me.

[ShroomsKit]

"No agenda"

Hilarious.

I'm seriously wondering if he's trying to fool himself or us at this point.
Either way it looks amazingly stupid.

[oda.krell]

I wouldn't read too much into it: the direct comparison of swap demand vs. offer is just a snapshot, so it's difficult to put it in context. Or am I missing how to get a historic view of it?

More relevant imo is a historic comparison like active swaps and average rate of active swaps. And that view, despite what some bulls in here like to think, is slightly bearish, with USD swaps pretty much maxed out.

Add to that a falling average return rate (better view perhaps by looking at FRR). Approaching a low point that we last saw ~10 days ago, shortly before the drop from ~650 to ~550.