What is happening? It doesn't appear correlated to BTCUSD price.
It started with BAKKT launch: maybe there is a reason for this?
Really weird.
I've noticed. It's very strange.
There are a few possible explanations:
- It reflects global trader sentiment, suggesting traders are overwhelmingly long.
- Smart money bought hard into the $6,000s dip and are well positioned for an uptrend.
- Shenanigans by Bitfinex or its largest traders.
The price action tells me the market is
not overwhelmingly long because it's marginal shorts who keep getting squeezed (see the spikes on December 4th, 9th, and today).
We can't judge whether these longs represent "smart money" until price moves far above here and we can declare the bottom.
That leaves us with "shenanigans." I don't understand the exact mechanics behind it, but there's something very unnatural about the short data from June and July as well:
Look at those two vertical drops on June 30th and July 11th. One June 30th, more than 20K BTC shorts closed and if you zoom in on the hourly chart, the price barely moved and volume doesn't reflect it. Same thing on July 11th, just to a smaller extent. To boot, these shorts were closed when price was downtrending, so they weren't "squeezed" into closing. Furthermore, the vertical drop over such a small time frame proves that this was
one trader or the exchange itself closing these positions.
Let's imagine this dynamic plays out in reverse this time, for longs. Price would significantly uptrend from here and these massive amounts of longs would be closed at once without affecting the price.
Really weird, suspicious stuff.......
