After the bitcoin (BTC) price reached a permanent high of $ 42,000 on January 8, it settled in a narrow range between $ 39,000 and $ 41,500 for two days, and the scientific structure in a shorter period of time showed that the gap was $ 45,000. option. …
This all changed dramatically on January 10, when the $ 39,000 support failed to hold and the price of Bitcoin entered a sharp correction.
The sudden and sharp drop of 26.6% led to a drop in BTC to $ 30,100 over the next 30 hours and $ 1.5 billion as a result of the subsequent sale of corrective derivatives on exchanges. Interestingly, this happened just when open interest rates on BTC futures reached $ 12.7 billion.
Today’s price movement is a story of pain, depression, and liquidation, but it does not mention that bitcoin’s price fell 20.4% just a week ago when it tested levels below $ 28,000.
During this similar price event, long-term contracts totaling $ 1.2 billion were entered into, so today’s price action is not much different from what the market saw just a week ago, on January 11.
As the chart above shows, BTC has recovered 11% after falling below $ 28,000 for an hour. What might surprise traders this time around is the 13% pullback from $ 32,200 to $ 36,400, creating a false bottom.
To understand if this is so, it is necessary to analyze the relationship between long and short traders on the crypto exchange and filter by hour.
Best OKEx dealers bought
Stock exchange data sheds light on the position of traders in the long and short term. By analyzing each client’s position immediately, as well as on fixed and future contracts, you can get a clearer idea of whether professional traders are leaning up or down.
That being said, there are sporadic differences in methodology between different exchanges, so viewers should look for changes rather than absolute numbers.
The ratio of long and short BTC positions at leading retailers. Source: Bybt.com
The top Binance traders have completed an average of 23% of preferred long trades in the past 30 days. This was not the case on January 7, when they began to yearn until they peaked at 59% in the early hours of January 10.
The move came when BTC overcame the $ 37,000 resistance and cleared the way to $ 41,500. As such, the best Binance traders basically reacted to every BTC price change process, rather than trying to predict it.
On the other hand, top retailers Huobi achieved an average of 0.91 buy-to-sell ratios in the past 30 days and thus prefer net card positions at 9%. From January 8th to the first hours of January 10th, these traders increased their short positions, thus making a profit as BTC was unable to break the $ 42,000 level.
The trend reversed as BTC lost $ 39,000 in support and top traders at Huobi slashed their net sales by 28% to 4% in an attempt to grab the bottom.
Finally, OKEx added top traders to long positions by lifting the index from 1.00 (unchanged) in the early hours of January 8 to 1.79 in favor of long positions in the early hours of January 11.
These traders bought up the top and were among those who pulled back abruptly when the price of bitcoin dropped 26%. The buy-to-sell ratio is again at 1.00 (unchanged) since BTC was worth $ 34,000 on Jan 11.
Bitfinex traders were surprised too
Bitfinex collects weekly P&L data from top traders, although users can “unsubscribe” from this scheme. Over the past 24 hours, the top ten have lost $ 153.3 million.
The associated losses during the crash shouldn’t mean Bitfinex traders were wrong. Some traders may be in bad shape, but in general they have made profit on the rally. Currently, Bitfinex traders have returned to a “neutral” position based on historical levels.
Bitfinex BTC price long to short (blue) compared to BTC price (orange). Source: Bitfinex
Data provided by Oslo Børs shows that the ratio between long and short Bitfinex increased from 2 to 9, favoring long positions between November 25 and December 21.
For comparison, the 6-month moving average is 6, with a bias towards long positions. Thus, these traders have made amazing profits given the data on the use of margin products.