This Bitfinex Credit Bubble cannot end well

[AceWallen]

This data is very misleading. The increasing (ATH) number of shorts doesn't exist in a vacuum. We don't know how much of these swaps are a) new traders/increased liquidity vs. old liquidity and b) how many swaps are actively being used to take short positions.

Follow this data at your peril.

About b. Is there any point in borrowing without opening a position? You still have to pay interest, what's the point?

for one thing, many people watch bfx data and try to extrapolate. if someone perceives that others will think "SHORT SQUEEZE!!!" when they see another 10k swaps taken out, maybe there is some incentive to borrow them.

[1714192570]

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[OgNasty]

Looks like we're seeing some short covering while the price is bottoming.

[opossum]

Looks like we're seeing some short covering while the price is bottoming.

It looks like you are right, at least about the first part of your statement.

The price on bitfinex is ~$10 higher then bitstamp and btc-e while having ~4x as much trading volume. I am not sure if the price really has bottomed yet or not, I guess we will probably see in the next day or so

[RoadTrain]

Looks like we're seeing some short covering while the price is bottoming.

And now the shorts are at over 25k BTC again.

[nrd525]

Swaps back to an all-time-high at 26,500 BTC.  A bit weird because the $150-$165 bottom sure looked like a desperate v-shaped crash to the absolute bottom (of the one year bear cycle).

[RoadTrain]

Looks like the recent upswing is totally because of some short closing.

[GrandmaJean]

Looks like the recent upswing is totally because of some short closing.

I wouldn't be surprised. Bitfinex has been trading above other major exchanges roughly since the price bottomed out. The price now roughly matches that of bitstamp and is ~$6 higher then btc-e.

I would say that this would indicate that buying pressure due to short covering is mostly gone. It will be interesting to see where we go from here

[betterangels]

reasons go higher, please post your extraordinary insight, we're looking into the crystal ball, as well, not much there, except maybe a pile up traffic jam of too many sellers and no buyers, which is more down, as well..

[Walsoraj]

My guess is that some exchanges had more fiat sitting on egopay than they are admitting.

[derpinheimer]

As long as there isnt a withdrawal rush it doesnt really matter. A long term downtrend could deplete fiat reserves though.

[Mieehayii]

this result is consistent with my prediction 

[molecular]

I calculated the ratio of longs vs. shorts:

[RoadTrain]

I'd be more comfortable if short covering was more dynamic, if short were squeezed
But it seems buying pressure is very limited

[molecular]

I'd be more comfortable if short covering was more dynamic, if short were squeezed
But it seems buying pressure is very limited

short squeeze will not happen at these level imo.

we need to be patient

[OgNasty]

I'd be more comfortable if short covering was more dynamic, if short were squeezed
But it seems buying pressure is very limited

short squeeze will not happen at these level imo.

we need to be patient

Yes, it seems people are expecting a short squeeze as the cause for a great rise...  Not really how it works.

[RoadTrain]

I'd be more comfortable if short covering was more dynamic, if short were squeezed
But it seems buying pressure is very limited

short squeeze will not happen at these level imo.

we need to be patient

Yes, it seems people are expecting a short squeeze as the cause for a great rise...  Not really how it works.

Not necessarily a rise, more like a ride Just want more volatility.

[Coinfan]

I have been bearish during all 2014 (just check my posts) and I'm still bearish. The breach of the long term support showed on a logarithmitc charter (that starts at 2.23 usds and was breached at around 274 on Bitstamp) doesn't promise nothing good.

All, or almost all, of bitcoin's recoveries in price had been in V. That is, a sudden crash, with heavy panic selling, followed by a fast recovery that ends up as a V on a price chart. We haven't seen that yet. This recent recovery seems to be a retrace back. It might keep going up, perhaps to 250 or 260 (who knows, I doubt that, but can go up to touch again the breached trend line, now at about 285), but I'm betting on heavy lower lows. But don't take that on me alone. Check what some are posting at tradingview.com.

That isn't necessarily negative. It can be an almost once in a life time opportunity, if you wait for the right moment to go long. Bitcoin's fundamentals have never been so good (major adoption by retailers). In due time, there is a pretty good chance that price will go up like a missile. But first, probably, there will be much more blood and tears.

This scenario will be falsified if bitcoin goes up above 300 usds.

[atlosas]

The bubble hasn't popped yet, we are yet to see capitulation stage i think.

[poncho32]

I have been bearish during all 2014 (just check my posts) and I'm still bearish. The breach of the long term support showed on a logarithmitc charter (that starts at 2.23 usds and was breached at around 274 on Bitstamp) doesn't promise nothing good.

All, or almost all, of bitcoin's recoveries in price had been in V. That is, a sudden crash, with heavy panic selling, followed by a fast recovery that ends up as a V on a price chart. We haven't seen that yet. This recent recovery seems to be a retrace back. It might keep going up, perhaps to 250 or 260 (who knows, I doubt that, but can go up to touch again the breached trend line, now at about 285), but I'm betting on heavy lower lows. But don't take that on me alone. Check what some are posting at tradingview.com.

That isn't necessarily negative. It can be an almost once in a life time opportunity, if you wait for the right moment to go long. Bitcoin's fundamentals have never been so good (major adoption by retailers). In due time, there is a pretty good chance that price will go up like a missile. But first, probably, there will be much more blood and tears.

This scenario will be falsified if bitcoin goes up above 300 usds.

This price rise since the crash looks over to me. I'm guessing there will be another crash to lower lows soon.

[molecular]

This price rise since the crash looks over to me. I'm guessing there will be another crash to lower lows soon.

guessing is the correct term.

there are always new lower lows... until there aren't.

it's anyones guess, I guess.