Topic: Bearish Bitfinex Sentiment Index almost 1:2 (Read 5622 times)

You can go SHORT with just USD in your trading wallet.
I tested that with a small amount.
So the 12.2M loans in USD can go either way.

There are three wallets in bitfinex trading-exchange-deposit. And you can move funds between them freely.
If you have 0 balance in your trading wallet you can't go short or long.
If you have BTC in your trading wallet they are represented in USD and your positions are calculated in USD.
This can go bad quickly and get a margin call on your positions.
That's why people borrow more USD than BTC from the lending mechanism of the exchange.
This what the trading wallet looks like:
USD   0.00
BTC   1.00
LTC   0.00
Margin Balance   $655.83
Tradable Balance   $2,623.32
Unrealized P/L   $0.00
Unrealized Swap   $0.00
Net Value   $655.83
Required Margin   $0.00
Leverage   4.0:1
Margin Requirement   14.0%

Also if you already have money (either USD or BTC) you don't need to borrow in order to margin trade. You just have to move them in your trading wallet in order to avoid a margin call.

The loans are secured, but there are risks.   Bitfinex can go down. Bitstamp can go down. The market can flash crash.  You can get hacked. And regulators could decide to regulate.  This explains why the rates aren't coming down to more reasonable rates (like 10% APR).

The loans are secured, but there are risks.   Bitfinex can go down. Bitstamp can go down. The market can flash crash.  You can get hacked. And regulators could decide to regulate.  This explains why the rates aren't coming down to more reasonable rates (like 10% APR).

Hi fellows,

I'm mainly gauging interest here. It is possible that I will need large amount of coins in the future, for my new business. Now, considering the recent history in bitcoinland and the continuous antitbusiness trolling and attacks on this forum, I wouldn't even think of offering a continuous deposit program, you all guess why. I did however made a poll and if there's enough interest for a continuous deposit plan I might consider it.

So I'm thinking of the following plan: when I need more coins than I have to fill an order, I will ask everyone that previously "registered" with me to lend me some btc. After 7 days, I will return all of it, principal + 2% interests. For you to be contacted, you would have to post here or in PM to say you might lend me bitcoins, and approx. how many you'd be willing to lend me.

Now the questions you might have:

What could you do to make so much profit?

Let just say that I do "arbitrage": I buy low and sell high.Those of you who understand it are already doing it, or don't have the time to do it and might be interested by my offer. Those that don't understand please forget about it and move on, I don't want anyone to invest in something they don't understand.

What are the risks?

Funds freezing by various institutions that hold part of my fiat funds is the main risks, but, beside being unlikely, I do manage it at my best. A high spike in BTC price could also hurt me, but because I mainly do arbitraging, only the profits (your interests) would be at risks. I could die also, but I'm young and in good shape so also unlikely All in all that's not high risks against the reward.

Who are you again?

My name is Raphael NICOLLE, but I prefer unclescrooge. I live in Lyon, France, and I'm 26. Google is your friend for more.

And now, a special one for my ponziiiiii friends: but why are you taking loans at such crazy rates instead of taking loans at fiat rates?

Would you take a loan in dollars at your bank to buy bitcoins? Me neither

Ok, that's all for now. If you have any questions, I'm here. Don't rush into the program though, It's not even open, and may never be. At this point I'm just checking the waters.

unclescrooge

Now that Pirateat40 closed down his operatations thanks to all the fud that was going on and growing on the forum, I expect
 everyone that spreads this fud, accused and insulted Pirate and the people that supported him to apologize.

Not only did Pirate brought us a great opportunity for investors (once in a lifetime actually), he did help stabilise and grow steadily bitcoin price, volume exchange, and thus contributed to the success of bitcoin. For that, Pirate, I want to thank you. You've done a wonderful work, and I hope you're stay around here.

Now, apologies on.

The loans are secured, but there are risks

I'm sure no banker ever said something along those lines.. but ok, if you say so..

What's the max ratio?

Don't worry, Bitfinex only allows a small ratlio and so price would have to go a lot higher before people start getting liquidated.

I haven't looked deeply into Bitfinex..

Can all of these positions default?

What protections are there in place?

EDIT: this sounds like a mess waiting to happen...

Holy cow, it's really become 2:1 now:

2:1 - Very Bearish
BSI ratio is 33.16 : 66.84

Looks like it's heading back over $700. If I was one of the short sellers on Bitfinex, I'd be starting to sweat a bit now.

There's tons of bid depth...

Looks like it's heading back over $700. If I was one of the short sellers on Bitfinex, I'd be starting to sweat a bit now.

Someone is bound to get squeezed. The question is who.

History tells me not to short bitcoins, but that doesn't mean it will hold true forever.

makes no sense why sentiment is bearish if 11m usd is lent out compared to 4000btc

Yes, but everyone is going short.

wouldnt snowball cause spike downward if more positions are going long?

In which direction does the market need to move in order to scalp the most people of which this indicator is based on?

I would bet in that direction.

It reminds me of starfish. *

What is this starfish and snowball youll talkin bout?

I'm glad someone in this thread remembers the starfish!

I made this tampermonkey script to get the real values out of the bitfinex stats page for BSI - makes things a lot clearer.

Ahhhhh, the starfish.  Please let this be another starfish.

In which direction does the market need to move in order to scalp the most people of which this indicator is based on?

I would bet in that direction.

It reminds me of starfish. *

The loan amount includes all the loans available + taken. It's at $11.4MM now by the way. The interest rate is pretty high too. Something is about to going down, you can be sure of it...

ok that make sense, since shorts are lower interest like less than .2%.  you'd also have to believe that about 5% of the total funds are just sitting there unused from ppl not noticing it or waiting on opportune time.

There's like over 10 million loaned out right now.  Are most of these positions going long or just funds sitting there?  Imagine if it is going long and people decided to liquidate, that would be a major sell off there.

I am just explaining how short and long are calculated and how the BSI indicator is affected.

You forget to mention the stress of opening such large positions and how you really have to be patient not to lose your shirt!

To open a 'short' or 'long' on the margin trading page, you are required to 'borrow' the corresponding amount of coins or usd from a lender, even if you possess the same amount yourself.  So many people are taking 'loaned' positions even though they're not. I do this myself a lot when trading because I don't want to bother moving funds between my trading and exchange wallets and using two different wallets and two different pages.

Let's say I have 100 bitcoins in my trading wallet. With this, I can simply 'short' 100 bitcoins to sell 100 bitcoins instead of moving the 100 to my exchange wallet and 'selling'. Then, when I am bullish again, I can 'cover' 100 bitcoins instead of buying. Then I can immediately 'long' another 100 bitcoins to go on margin, on the same page, without transferring funds from the exchange wallet to the trading wallet. I can also do both of these at the same time by 'longing' 200 bitcoins. this will both cover the 100 bitcoin short and open a 100 bitcoin long at the same time. Another thing I could have done in the beginning, if I am extra bearish, is go 'short' 200 bitcoins which would negate my 100 bitcoins plus be truly 100 bitcoins short at the same time.  Then when I'm ready, I can 'long' 300 bitcoins. This will cover the short, rebuy my bitcoins, and go long, all in the same trade, without moving around pages.

Now... The consequence of being lazy and using the margin trading page to 'long' when you actually have the funds to 'buy' or 'short' when you actually have the funds 'sell' is quite different. If you're buying btc, you have to pay ~1% interest per day on the USD. On the other hand, if you're selling btc, you have to pay ~0% interest on the BTC. Therefore, people are much more likely to do this with btc. This is what skews the indicator.

How long has it been like that?

If you have the bitcoin already, you can take a "short position" and it will not borrow anything unless you sell more than your btc margin.  The indicator being bearish with only 3.6k (I'm not sure where you are getting 13k, but I see 3.6) btc lent out indicates that much of the bearish sentiment is coming from btc holders rather than people who keep their margin in USD and would need to borrow.

Well, I could be wrong and please someone correct me if I am, but I thought if you borrowed fiat you had to leverage long and to leverage short you had to borrow BTC - own them to sell them first, then buy them back later.

Is this not correct?  Otherwise if you could go long or short with fiat or BTC, then BTC interest rates wouldn't be 1/5 of the fiat loan interest rates.

Which is why it doesn't make sense with $10 million dollars of fiat loans and only 13k BTC on loan, why the sentiment could be so bearish. Those stats seem to suggest the exact opposite.

In bitfinex you can short with dollars and leverage up to 4:1.
So you can take a loan and short.
Am I wrong?

Yes, I see this too but it is in direct contrast to the average loan rates, which have  gone to the moon. A month ago they were at an average of 50-70%. Now they are at an average of 250-500% which is extremely bullish.

There are more shorts now, but not nearly as many as leveraged longs.

Has anybody seen that.

I haven't seen that seen I started trading in bitfinex?
Not even the day it hit 400 dollars per bitcoin. I actually made a small trade at 388$(buy).
Is it time to dump hard?

ALMOST 1:2
Look at the bars.
The green bar is ALMOST half the size of the red bar.

Everybody can open an account at bifinex and watch this index without trading.
It's very interesting.
I just saying I have never seen this index that bearish.

Everybody can open an account at bifinex and watch this index without trading.
It's very interesting.
I just saying I have never seen this index that bearish.

So why does the pic say 1:1?

Almost 1:2
Since august I have seen even 3:1 which is very bullish.
This means that the green bar was 3 times bigger that the red bar.

Has anybody seen that.

I haven't seen that seen I started trading in bitfinex?
Not even the day it hit 400 dollars per bitcoin. I actually made a small trade at 388$(buy).
Is it time to dump hard?

How long has it been like that?