Bully bitcoin BTC$113,057.25 Bets on Bitfinex, one of the longest-running crypto exchanges, have been particularly rising in recent weeks, offering bearish fees for BTC prices, where BTC prices are below the key moving average support.
TradingView data shows Bitfinex's BTC/USD long positions have skyrocketed 20% over the past three months, reaching a margin trading position of 52,774. These longs represent positions that used the funds borrowed to purchase Bitcoin, amplifying both potential benefits and risk.
Typically, rising strengths mean strong purchasing pressure and bull market sentiment. However, the Bitcoin market has historically shown a paradox in which increasing leveraged strengths often precede price declines. This phenomenon is attributable to the tendency of traders to incorrectly screen market trends, leading to forced liquidation or discretionary sales that pushes up the opposite direction.
BTCUSD is keen on spot prices for Bitfinex vs BTC. (tradingView/coindesk)
Historical analysis reveals that BTC/USD's longings often move back to Bitcoin's price action. For example, past gatherings at BTC coincided with a decline in Bitfinex Longs, with prices falling together with rising longs. This inconsistent pattern marks these long positions as inverse indicators rather than simple bull signals.
Therefore, the current surge in Long is bearish. At the time of pressing, Bitcoin prices were temporarily below the 100-day simple moving average of $113,283.
This dynamic highlights complex interactions. Leveraged Long has shown optimism, but market reversals could set up painful liquidation, which could intensify volatility and price declines.
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