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Margin Trading: Longs, Shorts and Open Interest on BitfinexWhat can margin traders' behavior - arguably, ' smarter ' money-, tell us about current state of trends? Maybe some interesting things. Let's see: First, Open Interest (bottom pane). It represents all longs and shorts open at any given time, in Bitfinex. Its all time high (ATH) happened during the very bottom of last bear market: December 14, 2018. Shorts were in ecstasy, having piled up for an almost year-long period, starting January 19 (smaller dotted green line in Short's pane), and very close to their 5 times visited, previous ATH (thicker dotted red line, same pane). Longs, also, were very close to their previous ATH (thicker dotted red line in Long's pane, starting March 25). After some disillusionment(?) (downtrend channel), margin bulls started accumulating a month before 6k level breakdown. It looks they never felt bothered with an almost 50% drop. It seems they liked it, in fact. Of course they did! Whales' plays. Accumulation concluded February, 17 2019 (end of red dotted line in Long's pane), when prices started rising. Distribution instantly commenced as well. Something key, however, happened at the same time: the definitive breakdown from first overall open interest uptrend channel (see bottom pane again). More on this later on. On the way to the new 13.8k lower high, old shorts helped fuel the rise initially. And new ones as well, once frustrated after 6k and 9k levels were breached. Between swings, longs also contributed again too. But, remember Open Interest? Kept falling all the way through, inside a new down channel which became clearly visible. Open interest all time low (ATL) came 17 days after 13.8k high, on July 12, 2019. It's worth noticing the huge short claim / settling transaction which took place on June 29, as well - presented, in this study, in a custom view of an enhanced vol. indicator . Probably not a coincidence, near last open Interest previous ATL, form December 30, 2017. Interesting, huh? From then on, we've been witnessing a new bear market. Noticeable aspects since then: Shorts remain inside their downward channel, and have not piled up during this fall , as happened during the previous one. At most, they moved almost sideways some times. Still, they just renewed their ATL (as of the moment of this writing). Longs, instead, behaved similarly to previous bear market - but less aggressively, until.. Bulls jumped onboard margin longs in a way never seen before , starting November 21, 2019, bringing the ticker to a new ATH , and, as of December 1st, out of Open Interest's downward channel . What is it that they know? Wish I knew. But what we can see is that there was a clear breakout from a long-time rising triangle in margin longs . Shapes work here too, it seems. Another "coincidence": last recent Open Interest top happened at the same price level as the previous Open Interest ATH (April 10, 2018). To conclude, what suppositions can we make with somewhat decent level of reason here? Maybe these: If Open Interest continues its path towards a new upward channel while price manages to break out from current downtrend as well, we can see a great new bull market take shape. Still, there are way less short positions open to fuel the uptrend now. There are lots of longs open. If bull rally fails, these whales (or could it be only one?) may not want or be able to hold, and trigger a massive sell-off. So, yes, we're standing over a huge crate of dynamite. So... ...trade wisely. Lose little. Stay in the game. PhinkTrande
BITSTAMP:BTCUSD
by PhinkTrade
4
After bird's view, a closer look: 2D chartWell, hello again, fellows! Together with Monthly and Weekly time-frames study, just published , I've prepared also this 2D view, mainly because it presents some key events, which I think are good to point out to. Lets see: First one is, clearly, the combined fib retracement levels: 0.786 (from 10.5-6.5k wave) and 0.5 retrc. (from 13.8-6.5k). This was a hard resistance last time we were here, but chances are better now, as we have some good targets to fulfil above. Still, need to close above again. Bad luck we have that TD setup resistance line so close, @ 9640. If we hit it on a 2D TD 5, you can bet on pullback. Still, uptrend line is below us, so while it's there, things should be ok to continue uptrend. Maybe we need to touch it to get a boost. Losing it is a bad sign. If we manage to break higher, more resistance points at TD risk line, 0.786 projection level from Wave 3 (6.8-9.1k), another mid-range phi-based level, 0.618 retracement lvl from 13.8k, and, finally, textbook Wave 5 projection target: 100% of Wave 3, @~10.5k. That also would be the apex of the rising wedge we seem to be in. Will bulls manage to conquer this all? If Weekly and, specially, monthly traders get interested (pls see previous idea )published, probably yes. Then what? Well, then correction, most likely. A healthy one, though. We'd have completed a textbook 5 leg on the Daily/2D. Then, retracing 0.382 to 0.618 would do no harm (to the trend, at least ;)). It would keep us with a higher low, and looking for the much waited break of the larger downtrend line from 20k. This will be such a great moment for us all, indeed. Hope it doesn't take too long. Best! PHInkTrade
BITFINEX:BTCUSD
by PhinkTrade
One hard truth about trading crypto: many 'clocks'Well, friends... Hello again! After turn of day excitement and disillusionment, here a simple but important example of how key is to keep more than one exchange in check for key levels: 4.272 projection for 'wave 1', down at low 8000's, was hit on many, if not all (most relevant) crypto exchanges, except... Bitstamp. Now, not anymore. It cost some folks the bad sensation of being trapped for who knows how long, or be point-blank stopped. Could they have avoided it? What do you think? So, trading crypto is a bit like having many clocks. You never know which one is right at any given moment. As such, the best you can do is, whenever you have a target, double-check it on multiple "clocks" / exchanges. Those that I watch more frequently, here on TradingView, are: BitMEX Bitstamp Bitfinex Binance Coinbase HitBTC (BTW, there was a second option to avoid this trap: as it usually happens in many trading situations, this latest rejection level is also related to 2 day TD Setup resistance line. Please check related idea for more information.) Now, changing topics, briefly: another noticeable event, also highlighted on charts, are "off-the-book" margin operations on Bitfinex, which frequently lead to higher volatility, as exemplified. Such event preceded latest run up too. To learn more about this topic, please check here . So, what you think now? Price going down -- a bit a least -- or no chance, the way is up? Cheers! PHInkTrade
BITFINEX:BTCUSDEducation
by PhinkTrade
A look at Higher Time-frames (HTFs): Log Fibs RuleHi there, friends! Hope you doing well. So, as we entered a new month, and are soon starting a new week, it's good idea to revisit the charts for these high time-frames and see where we are. As you can see, log fibs are just killing it on this task (thankfully, Tradingview brought us this feature. Wished they've done it in 2017). Ok, so here what we have: A great bounce on larger 0.236 fib. retrc. level, on Monthly chart*, gave us a fantastic January, engulfing 2 down candles' real body, and turning monthly TD count to green 1. *(6487, from ~170-20k USD wave; Bounce level also corresponds to 0.5 retrc. level from 3.2-13.8k USD wave on Weekly chart). Bouncing on such high fib level, BTW, is a nice sign of bullishness, specially after having bounced also on a high, 0.382, level, on Dec/18. It may be hard to believe, but yes, even after falling from 20k to 3.2k (losing 83+% value), bouncing on a 0.382 level is a strong bullish sign: it is the first usual retracement level from which traders expect an asset may bounce from, if it's very bullish ). Good! Back to present day, movement brought us quickly to where we stand at the moment. It happens now that next 2k USD range, represented also by red area on Weekly chart, is definitely going to be challenging, as we're close to key resistance levels -- depicted and commented on both monthly and weekly charts. This includes a wave 5 target from the Daily chart, which I'll publish soon as well. So, a break above January's high, which may come with the turn of the week, may bring in some large players trading monthly TD (green 2 above green 1), but it can also become a bull trap, if such players don't really show up. Pay attention to volume, OBV and Open Interest . My enhanced Volume Indicator can help with the task, as it shows what margin traders are doing (on BFX). Make sure you check it out. Pay attention also to the nearest supporting trend line. While price is above it, there is still hope. Otherwise, we should see a correction. The fact we seem to be making a rising wedge (visible on Weekly chart) also suggests a correction is near. Next week is a TD 5 on Weekly. Even though positive, from my experience, TD 5's are prone to be counter-trend. So, let's be careful. To conclude, look, on monthly chart, how the halving period interestingly coincides with the apex of the second larger triangle we are in. If we don't manage to break and sustain above the higher downtrend line, @11790 for current monthly candle, we will likely see BTCUSD break below 6400, and reach the lower uptrend line, perhaps @~5.4/5.6k levels. This would complete a downside target from a smaller descending triangle, visible on Weekly chart, as well as 0.618 retracement level, on same chart. Interesting times. Let's trade it wisely ! And always remember: trade correctly and lose little, so you can stay in the game. Do it, consistently, and making money will be a consequence. Best of success! PHInkTrade
BITFINEX:BTCUSD
by PhinkTrade