Short

Bitcoin short ATTEMPT #2

Updated

Technichals:
Risign wedge coming to an end + daily MACD and RSI divergence (also confirmed in weekly).
We need a breakdown of the wedge to confirm short.

Entry: 1322
SL: 1390
Targets: 1230 (20%) - 1135 (60%) - 1030 (20%)

Fundamentals same as last attempt:

China crypto withdrawals frozen. They could be potentially about to be opened again. We'll have to pay attention to this, specially if you are trading okcoin quarterlies futures.
SEC told us twice (COIN etf and SolidX etf) that bitcoin is not safe for average investor. It will probably say no too to the current review of COIN etf.
Scaling stalled. Neither SegWit softfork nor bigger blocks hardfork seem to reach enough support, and unfriendliness keeps escalating.
Withdrawal of fiat issues in usd exchanges (bitfinex and okcoin mainly). With potentially more serious issues in Bitfinex. Read below for my take on this.

** Now a conspiracy theory. This has not much to do with this trade in particular, but i wanted to express my opinion somewhere. **

My take in the bitfinex issue:

They get hacked for 120k btc without providing any proof of the amount hacked. 120k btc were worth +75M usd at the time (+160M usd now). They dont provide a proof of the actual users holdings in the exchange either.
The debt is settled in usd. They give out a debt token, to regularly pay dividends back from bitfinex earnings.
They make several payments over time: 1.2%-1.3%-2%-4.6%-5% and then a final payment of 100%.
The last and biggest payment happens when they can't wire fiat out of their exchange
A big premium of up to 10% starts to be built in their exchange over other exchanges.

So in the best case scenario, in my opinion, they played their customers.

This is my conspiracy theory:

First they probably inflated their loss in the hack (not saying there was no hack, but that the hack was for a smaller % of the users holdings). Remember they didnt officially provide any proof neither from the actual amount of btc stolen nor the actual users holdings in bitfinex.
Then used the money they falsely reported as hacked to buy debt tokens in the initial panic for about 30-40% of the money owed. Win-win for bitfinex.
Later they started to pay some small percentages to keep the hopes up (1.2% 01-Sep, 1.3% 30-Sep, 2% 10-Jan, 5% 06-Mar). Probably used these payments to inside trade their own debt tokens. Notice that by they 10th January payment only 35M usd of debt were left to pay. 25M by the march payment. The remaining debt was either converted to iFinex equity or "eaten" by bitfinex financial magic.
Sometime in late march, they find banking issues, being unable to wire fiat out. And this is key in this conspiracy theory. This will allow them to pay back the remaining debt for, once again, less than the owed money.
They payout the remaining debt in bitfinex balance (without being backed by real usd? at least not everything)
They announce fiat withdrawal issues, creating a premium on their exchange.
They start arbitring from other exchanges to theirs for a 5%-10% profit per coin. About 70,000 bitcoin ran away from bitfinex with their withdrawals issues, make some numbers.

The final goal of all these: simple, wipe out 120k btc (settled at 70M usd) in debt with probably not even 5-10M usd spent. They sucked the money from their own customers (first buying debt tokens for less than 50% of the debt represented, then selling them cryptocurrencies for ~8% profit, all with customers money. They probably also inside traded their own debt token prior each payment and inflated their loss in the hack).

And this is the best case scenario i can imagine. Lol i'm mentally ill. Don't listen too much to me.

To sum up, if we (customers) are not dumb, we should create demand for one of the next: fully regulated bitcoin exchanges or fully decentralized bitcoin exchange

Note

We never broke the wedge down, instead, we broke it up.
And we cleared both RSI and MACD daily divergences.

Nevertheless i took profit of this move to short at the top of the almost 4 year rising wedge. We still have in play a potential weekly RSI bear divergence.

Entry point: 1450
Stop loss: 1530
Target: 1190 and 1120
Leverage: x2

Note

Outloowk of the wedge combining the bitstamp and coinbase prices, to soften the prices divergences between exchanges.

Note

Some numbers on the bitfinex issue. All numbers rounded up to favor the opposite direction of my theory.

Average monthly volume since hack: 1,000,000,000 USD
Source: 13th March they reached a 1B USD 30 day volume record (twitter.com/bitfinex/status/841298107853869059)
26th March, they reached a new record, 2B USD 30 day volume (twitter.com/bitfinex/status/847145553905565696)
Currently, they have a 1.8B 30 day volume, you can check it in their home page (bitfinex.com/)

Average fees per transaction: 0.3%
Source: 0.1% maker fees + 0.2% taker fees (bitfinex.com/fees)

Time since hack: 10 months

Now a bit of maths:
1,000,000,000 x 10 months = 10B usd traded since hack in their platform
10,000,000,000 x 0.003 = 30M usd in fees collected by bitfinex

So bitfinex made 30M usd in legit GROSS profits tops. I guess bitfinex employees are not working for nothing, and that they get payed. I guess that bitfinex servers also have to be paid.

And somehow they managed to pay +70M usd in debt. It adds up to you?

Note

Added some sell orders at 1475 and 1495

Note

Key level for bitcoin:

This short could be stopped anytime if we break the wedge.

Note

Paying attention too to this potential double top in okcoin btccny
if it is cleared my guess is that we will push up an other ~100-200 usd

Note

I also like this wedge breakdown and retest in okcoin btccny
s3.amazonaws.com/tradingview/snapshots/l/LeCwUOx6.png

BTW, i got filled my 1475 order increasing my base price to 1462.5. we kissed my 1495 order but it wasn't reached just for a couple usd.

Readjusted my targets a bit:
1195 (50% retracement)
1121 (61.8% fib retracement)
1020 (78.6% fib retracement + bottom of wedge)

Note

looking for a reentry on this short.

Trade closed: stop reached

The loss of this trade was a 3.6% before leverage. Including the leverage the loss ascended to 7.2%

bagofXMR

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