Traders using VERI to Short BTC? (Short Term)
As all of y'all know, BTC has had a rough few hours. It certainly is a trying time to be an investor.
Out of curiosity, I was checking for correlations between BTC and other alt coins and I was just looking at an absolute bloodbath. ETH, XRP, BCH, EOS, LTC, ADA, XLM, IOTA, NEO, DASH, XMR, NEM, BNB, ZEC, and LSK are all down.
There was, however, one exception, and this is where things start to get weird. VERI is currently heavily up (over 25%!) versus BTC at the time of writing, and seeing this I decided do a little digging. As you can see, I have overlayed the 4H BTC chart with VERI performance over the last few months. The results are pretty odd. Starting in January, every time BTC moves down or moves into a bearish trend VERI picks up like crazy. Looking at the trend from January 15th to February 14th, you can see that this coin spiked when BTC at the time was getting seriously sold off? Why?
Was this because of the underlying project, or is something much more sinister going on here?
I googled the project and there seems to be nothing special about this. The project, from what I can gather, is one that is attempting eliminate brokerage services and banks from financial markets through peer-to-peer interactions. To my knowledge, I can think of over 25 coins that are already trying to accomplish this in some capacity; so in my opinion there isn't anything special here.
If you couple this information (that the project isn't that incredible) with the fact that the coin hasn't performed well against BTC in the long run, I begin to think that something else is going on.
I have been writing for some time about the lack of value that cryptocurrency exchanges offer when it comes to the ability to short crypto. There are numerous way they could accomplish this without losing their own money, and it still baffles me to this day that they are no where near the trading technology of established forex brokerages (hopefully this will come soon).
I think there could be a possibility that many traders are making back-room arrangements to all buy one coin in the event of a sell-off; once the sell-off is over they put their money back into BTC and gain BTC over and over again. This seems like the only logical explanation to considering this coin has vastly under performed versus BTC and other projects, but somehow is vastly over performing every coin in times of panic.
If there are such agreements and arrangements (to form a "cartel" to all buy the same coin in the event of a crash), this could present an interesting opportunity to be able to hedge against downside BTC and ETH risk.
I checked the latest trades and such on the biggest listed exchange, Latoken. I have personally never heard of this site, but I went anyway and fund that the volume, at the time is writing is near $450,000 (according to Coin Market Cap). I'm not sure if this exchange is involved or not, but I think this is very interesting correlation.
You can easily see this will not hedge against risk in the long term, but I think that these trades are trying to avoid the massive one candle sell offs by holding this coin for a short period.
Throughout the course of the Bear market (which seems to be never ending) I will checking back through to see what opportunity this presents.
Out of curiosity, I was checking for correlations between BTC and other alt coins and I was just looking at an absolute bloodbath. ETH, XRP, BCH, EOS, LTC, ADA, XLM, IOTA, NEO, DASH, XMR, NEM, BNB, ZEC, and LSK are all down.
There was, however, one exception, and this is where things start to get weird. VERI is currently heavily up (over 25%!) versus BTC at the time of writing, and seeing this I decided do a little digging. As you can see, I have overlayed the 4H BTC chart with VERI performance over the last few months. The results are pretty odd. Starting in January, every time BTC moves down or moves into a bearish trend VERI picks up like crazy. Looking at the trend from January 15th to February 14th, you can see that this coin spiked when BTC at the time was getting seriously sold off? Why?
Was this because of the underlying project, or is something much more sinister going on here?
I googled the project and there seems to be nothing special about this. The project, from what I can gather, is one that is attempting eliminate brokerage services and banks from financial markets through peer-to-peer interactions. To my knowledge, I can think of over 25 coins that are already trying to accomplish this in some capacity; so in my opinion there isn't anything special here.
If you couple this information (that the project isn't that incredible) with the fact that the coin hasn't performed well against BTC in the long run, I begin to think that something else is going on.
I have been writing for some time about the lack of value that cryptocurrency exchanges offer when it comes to the ability to short crypto. There are numerous way they could accomplish this without losing their own money, and it still baffles me to this day that they are no where near the trading technology of established forex brokerages (hopefully this will come soon).
I think there could be a possibility that many traders are making back-room arrangements to all buy one coin in the event of a sell-off; once the sell-off is over they put their money back into BTC and gain BTC over and over again. This seems like the only logical explanation to considering this coin has vastly under performed versus BTC and other projects, but somehow is vastly over performing every coin in times of panic.
If there are such agreements and arrangements (to form a "cartel" to all buy the same coin in the event of a crash), this could present an interesting opportunity to be able to hedge against downside BTC and ETH risk.
I checked the latest trades and such on the biggest listed exchange, Latoken. I have personally never heard of this site, but I went anyway and fund that the volume, at the time is writing is near $450,000 (according to Coin Market Cap). I'm not sure if this exchange is involved or not, but I think this is very interesting correlation.
You can easily see this will not hedge against risk in the long term, but I think that these trades are trying to avoid the massive one candle sell offs by holding this coin for a short period.
Throughout the course of the Bear market (which seems to be never ending) I will checking back through to see what opportunity this presents.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.