Topic: This Bitfinex Credit Bubble cannot end well - page 9. (Read 62097 times)
Longs did decrease a little 17,784,961.49 USD
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I am surprised we haven't had a flash crash, already.
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I am surprised we haven't had a flash crash, already.
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Me too. This drop to 298$ should have triggered margin calls and a flash crash due to long squeeze.
Can someone explain why it didn't happen? Could BFX be cooking the books to avoid this?
This. I wonder. I actually think they are making the matter worse by not allowing some of the forest to burn. If I were engineering the world I'd say let it burn to about $260... then we can get a bounce in the weeks thereafter into the $400 to $500 range and calm down for a bit.
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I am surprised we haven't had a flash crash, already.
...
I am surprised we haven't had a flash crash, already.
...
Me too. This drop to 298$ should have triggered margin calls and a flash crash due to long squeeze.
Can someone explain why it didn't happen? Could BFX be cooking the books to avoid this?
More may be coming now I suppose? I don't see any terrible bubble in the long swaps anymore, but we do have near 20 million USD left and the price is going down hard.
I am surprised we haven't had a flash crash, already. Frankly, if that would have happened around the $400 level then we'd probably have seen a reprieve, already. It's almost like controlled burns in a forest -- because BFX didn't let it burn a month or two ago we never established a safe zone. Hence, the steady drip downward was able to continue.
Given the amount of longs has not changed much in the past few weeks, I'd have to imagine that those in the red have added outside funds to their account to avoid getting a margin call. That said, the fuse has to be ready to light soon. I'd expect us to have a mini-flash down to about $260 (plus or minus $10 to $15)... then a pop up from there. If not that, then Jesus.
While the USD amount of swaps is down from the peak, it could actually represent a larger BTC long position.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It isn't as simple as that. The number of short contracts is also at ATH, no? Once the selling stalls, a squeeze is possible.
50,000 long vs 12,000 short battling on a downward trend. Pretty simple i'd say.
Since the long : short ratio has always been skewed to the long side it clearly isn't that simple.
While the USD amount of swaps is down from the peak, it could actually represent a larger BTC long position.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It isn't as simple as that. The number of short contracts is also at ATH, no? Once the selling stalls, a squeeze is possible.
50,000 long vs 12,000 short battling on a downward trend. Pretty simple i'd say.
While the USD amount of swaps is down from the peak, it could actually represent a larger BTC long position.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It isn't as simple as that. The number of short contracts is also at ATH, no? Once the selling stalls, a squeeze is possible.
While the USD amount of swaps is down from the peak, it could actually represent a larger BTC long position.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
It is more likely that there are a large number of positions in the red, but if people have put new money into the exchange it could represent as many as 50,000 bitcoins (at $400).
So we might yet seem a flash crash. I've been wondering if the bottom would be a slow reversal, or if it'd have a mini flash crash. December 2011 had a slow reversal if I recall correctly.
The time has come for every single long position to be in the red 
More may be coming now I suppose? I don't see any terrible bubble in the long swaps anymore, but we do have near 20 million USD left and the price is going down hard.
20.5 million and growing.
My first reaction was to think that Bitfinex learned how to handle big amounts of Swaps, so there was no ground for being concerned, even if the amount of swaps goes over 30 million again. Especially, taking in account the strong bids on the "new" orderbook.
However, my target for bitcoin price (it might be wrong, trust me not) is still much lower than the current price. And it might get there faster than expected and this time will be global crash, not a crash restricted to Bitfinex. That is, the Bitfinex price won't go back up again after 30m or so as in a simple flash crash motivated by liquidation of long positions. It might keep going down.
Therefore, the new Bitfinex system of limiting the dump of the squeezed/liquidated longs might mean selling even lower. It will be wise to apply it only as long as the price at Bitfinex is lower than the general price. Otherwise, the amount of the sell can end up again being short to pay the lenders.
And as the interest rate go up again, some of the bidders [that are hoping to pick a few cliffdivers (that is, liquidated bulls)] might decide it's safer to lend again, removing some of those new bids and weakening again the orderbook.
About the bulls on borrowed money: the only lesson history teaches us is that people don't learn from history. Trying to guess a bottom of a bearish trend on borrowed money is playing the Russian roulette with money.
My first reaction was to think that Bitfinex learned how to handle big amounts of Swaps, so there was no ground for being concerned, even if the amount of swaps goes over 30 million again. Especially, taking in account the strong bids on the "new" orderbook.
However, my target for bitcoin price (it might be wrong, trust me not) is still much lower than the current price. And it might get there faster than expected and this time will be global crash, not a crash restricted to Bitfinex. That is, the Bitfinex price won't go back up again after 30m or so as in a simple flash crash motivated by liquidation of long positions. It might keep going down.
Therefore, the new Bitfinex system of limiting the dump of the squeezed/liquidated longs might mean selling even lower. It will be wise to apply it only as long as the price at Bitfinex is lower than the general price. Otherwise, the amount of the sell can end up again being short to pay the lenders.
And as the interest rate go up again, some of the bidders [that are hoping to pick a few cliffdivers (that is, liquidated bulls)] might decide it's safer to lend again, removing some of those new bids and weakening again the orderbook.
About the bulls on borrowed money: the only lesson history teaches us is that people don't learn from history. Trying to guess a bottom of a bearish trend on borrowed money is playing the Russian roulette with money.
Yeh! My loaned USD got closed out and returned (15 days early). Bought some BTC !
I was about to post earlier this week that the Finex credit crunch appears resolved when we were 470'ish.
Seems like we've entered another round of POP.
Seems like we've entered another round of POP.
Those bids that look apparently bullish come from the squeezed longs. They are waiting to buy at lower prices.
Bitfinex may be now the best choice for big dumpers.
Bitfinex may be now the best choice for big dumpers.
Quote
Bitstamp | Total bids: 6939329 USD. Total asks: 22709 BTC. Ratio: 305.56511 USD/BTC. | Data vintage: 0.0294 seconds
hmmm ok bitstamp
Quote
gribble> Bitfinex | Total bids: 9662015 USD. Total asks: 7565 BTC. Ratio: 1277.03315 USD/BTC. | Data vintage: 0.0269 seconds
margin data via http://www.bfxdata.com
longs
Quote
0.0402 19 640 310.00 18:43:01 13-09-2014
shorts
Quote
0.0108 5 870.30 18:43:01 13-09-2014
9662015-19640310=-9978295
7565-5870,30=1694,7
-9978295/1694,7=-5887,94181861096359237623
best ratio ever
Yes, but as you know, not all of the borrower bitcoins can be withdraw. The borrowed bitcoins are stuck, but also any of his bitcoins necessary to keep the required collateral to the swap.
Anyway, right now, I think all people borrowing bitcoins to go long are playing Russian roulette with their money. But, well, there is always somebody thinking "You have to be crazy not to buy bitcoin at these prices, I'm going to sell the house and one kidney to buy bitcoins".
I guess he will be ready to sell 25% of his blood and, perhaps, will even think about the second kidney ("I could do dialysis"), if we breach 440 usd per btc. But for me, if this price is breached, bitcoin will be on a very dangerous situation. I have been bearish all year, with very little short-term exceptions.
Still waiting for the right price to go in again (down below), but still positive on the long-term.
Anyway, right now, I think all people borrowing bitcoins to go long are playing Russian roulette with their money. But, well, there is always somebody thinking "You have to be crazy not to buy bitcoin at these prices, I'm going to sell the house and one kidney to buy bitcoins".
I guess he will be ready to sell 25% of his blood and, perhaps, will even think about the second kidney ("I could do dialysis"), if we breach 440 usd per btc. But for me, if this price is breached, bitcoin will be on a very dangerous situation. I have been bearish all year, with very little short-term exceptions.
Still waiting for the right price to go in again (down below), but still positive on the long-term.
You can withdraw bitcoins that aren't necessary to fulfill the required collateral to the borrowed money.
= your BTC... 
You can withdraw bitcoins that aren't necessary to fulfill the required collateral to the borrowed money.
I think people doing this are only increasing their risk of getting a margin call and increasing the overall risk of there being another margin/leverage related crash. When people are keeping as little equity in their account as possible, they are making it so that there is less room for "error" (meaning less room to weather a minor price decline). Jump to: