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Bitcoin [BTC] market to make it or break it at $7300? Bitcoin Shorts skyrockets on Bitfinex

Priya

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Bitcoin [BTC] market to make it or break it? Bitcoin Shorts skyrockets on Bitfinex
Source: Unsplash

Bitcoin [BTC] recently broke past the $7000 mark after falling in the bear’s grip last month due to the postponement of Cboe VanEck ETF by the SEC. This was days after the forceful liquidation of the shorts on BitMEX.

BitMEX, one of the leading Bitcoin Mercantile exchange platform, is believed to be the catalyst for the coin to break past the $6500 mark. The DDoS attack which led to the liquidation of shorts of several traders took place on 22nd August. This coincided with Bitcoin reaching up to $6700 from $6400. This led to the whole cryptocurrency community claiming that the cryptocurrency exchange is involved in manipulation.

However, on 2nd September, the Bitcoin Shorts skyrocketed from 22050 to 33276 within 4 hours on Bitfinex. At press time, the BTC shorts were trading at around 33000.

Bitcoin shorts skyrockets within 4 hours | Source: TradingView

Bitcoin shorts skyrockets within 4 hours | Source: TradingView

Short sellers refer to the traders who make a profit when the cryptocurrency market is in the bear’s grip, opposed to long sellers. These sellers borrow the cryptocurrency when the price is high and sell them when the price is low, thereby replacing the cryptocurrency and profiting off the dip. These traders can close their position by placing a limit on the margin order on the short-cryptocurrency.

This type of trading could be risky as the cryptocurrency market is highly volatile. There are times when the price of the cryptocurrency sees a surge in the market, opposed to the market situation. This was followed by short-sellers liquidating their assets in the market. However, due to the mechanism of the liquidity, the short-sellers lose only what was leveraged.

The recent hike in the shorts could be because of the news of $1 billion worth of Bitcoin [BTC] which is connected to Silk Road accounts. These Bitcoins are being transferred to Binance, Bitfinex and BitMEX. The short-sellers are probably anticipating for the coin to be sold in the market within the next few days.

Flood [Bitmex] said:

“Never seen such anger over bullish posts. Love it. Casual 12k bitcoin added to margin shorts over the last 24 hours. All at or under 7.3k.”

Debaas, a Twitterati said:

“This has to be the moment for bulls to show the bear trend over. To 7800 or else i think we see another 5800 or even lower soon.”

Sensei Elliott, another Twitterati said:

“anger and negativity dont belong in traders toolbox. Eventhough i bearish still i dont get angry bout your bullish posts. I find them refreshing and also nice look for alternative perspectives”

Arthurgle, another Twitterati said:

“this usual. you are overhauling things. shorts will win. you will want help in near future.”

According to CoinMarketCap, at press time, Bitcoin [BTC] was trading at $7279 with a market cap of more than $124 billion. The coin has a dominance of 53.1% of the whole cryptocurrency market and has seen a significant rise of more than 7% in the past 7 days.





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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

Bitcoin

Bitcoin’s on-chain/off-chain valuation indicators the key point of focus as coin heads to $13,000

Akash Anand

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Bitcoin's on-chain/off-chain valuation indicators they key point of focus as crypto heads towards $13,000
Source: Pixabay

With the rise in Bitcoin’s price, the rest of the cryptocurrency market has followed suit by displaying a green trend across the board. In a recent series of tweets by popular cryptocurrency analyst Adam Tache, users were informed about the top Bitcoin on-chain and off-chain valuation indicators, derived from on-chain valuation models.

The analysis touched on the Mayer Multiple created by dividing the price by the all-important – 200 day moving average. The current average Mayer Multiple stands at a figure of 1.39, which may climb higher. Looking at previous figures, the normal Mayer Multiple figures stated that if the value shoots up to 2.4, then Bitcoin eventually retraces back to a comfortable 1.5. The Mayer Multiple is usually considered as the original indicator used to clock the valuation of Bitcoin.

Another major indicator discussed in the thread was the NVT Ratio invented by Willy Woo, Partner at Adaptive Fund. The indicator is used to calculate Bitcoin’s prominence or value in the cryptocurrency space by evaluating the amount transacted on the blockchain as a “proxy for investment flow and bear and bull market cycles.”

At the moment, the NVT ratio for Bitcoin is in an abnormal region compared to the start of previous bullish patterns. The NVT ratio was above the “bear market” separator, which meant that the cryptocurrency was overbought. When Bitcoin is overbought, it usually means that the buying pressure is much higher than the selling pressure. Adam Tache opined,

“NVT signaling overbought is likely due to a number of factors — namely the proliferation of exchange-based, purely off-chain txs driving short-term price action.”

The analysis also pointed out the liveliness of the Bitcoin indicator created by Tamas Blummer. The indicator showed the inverse count of lost or ‘HODLed’ Bitcoin, while stating that when the ratio increases, long-terms holders of the cryptocurrency decrease their positions. The indicator conveyed accumulation of Bitcoin when the ratio decreased.





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