{"id":268901,"date":"2021-06-07T23:35:31","date_gmt":"2021-06-07T20:35:31","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\/"},"modified":"2021-06-07T23:35:31","modified_gmt":"2021-06-07T20:35:31","slug":"crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\/","title":{"rendered":"# Crypto Twitter says traders are short Bitcoin, but data shows otherwise"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a282792ae0d9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a282792ae0d9\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\/#Are_analysts_flipping_bearish_based_only_on_Bitfinexs_margin_data\" >Are analysts flipping bearish based only on Bitfinex\u2019s margin data?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\/#The_perpetual_futures_funding_rate_is_still_flat\" >The perpetual futures funding rate is still flat<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\/#The_options_put-to-call_ratio_remains_bullish\" >The options put-to-call ratio remains bullish<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Crypto <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> says traders are short Bitcoin, but data shows otherwise <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>Margin trading allows investors to borrow stablecoins or cryptocurrency to leverage their position and improve the expected return. For example, borrowing Tether (USDT) will allow one to buy Bitcoin, thus increasing their Bitcoin (BTC) long position in.\u00a0<\/p>\n<p>Investors can also borrow BTC to margin trade a short position, thus betting on price downside. This is why some analysts monitor the total lending amounts of Bitcoin and Tether to gain insight into whether investors are leaning bullish or bearish.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_analysts_flipping_bearish_based_only_on_Bitfinexs_margin_data\"><\/span>Are analysts flipping bearish based only on Bitfinex\u2019s margin data?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This week some prominent analysts cited a surge in Bitcoin short positions at Bitfinex, peaking at 6,621 BTC on June 7. As Cointelegraph reported, independent researcher Fomocap found a visible correlation between margined short positions and the May 19 price crash.<\/p>\n<p>However, when analyzing a broader scene, including the margin longs, perpetual contracts funding rate, and protective put options, there is no evidence of prominent players preparing for a surprise negative move.<\/p>\n<p>A single instance of Bitcoin margin shorts spiking ahead of the negative price swing should not be considered a leading indicator. Furthermore, one needs to factor in the Bitcoin margin longs, an opposing and usually larger force.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/ff71f62b-ddec-4eb9-90a2-bafd32fcd6bd.png\"><figcaption style=\"text-align: center;\"><em>Bitfinex margin Bitcoin\/USD longs\/shorts ratio. Source: TradingView<\/em><\/figcaption><\/figure>\n<p>As the above chart indicates, even on May 17 the number of BTC\/USD long margin contracts outpaced shorts by 3.6 times, at 39,000 BTC. In fact, the last time this indicator dropped below 2.0, favoring longs, was on Nov. 26, 2020. The result was not good for the shorts, as Bitcoin rallied 64% over the following thirty days.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/9a331fb1-503b-4ea7-981e-eb13e7241218.png\"><figcaption style=\"text-align: center;\"><em>OKEx USDT\/BTC lending ratio. Source: OKEx<\/em><\/figcaption><\/figure>\n<p>Whenever traders borrow Tether and stablecoins, they are likely long on cryptocurrencies. On the other hand, BTC borrowing is mainly used for short positions.<\/p>\n<p>Theoretically, whenever the USDT\/BTC lending ratio goes up, the market is angled in a bullish manner. The ratio at OKEx bottomed at 3.5, favoring longs on May 20, but quickly returned to the 5.5 level. Therefore, there is no evidence of a significant movement favoring shorts on margin markets.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_perpetual_futures_funding_rate_is_still_flat\"><\/span>The perpetual futures funding rate is still flat<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Perpetual futures prices trade very close to regular spot exchanges, making the lives of retail traders a lot easier as they no longer need to calculate the futures premium.<\/p>\n<p>This magic can only be achieved by the funding rate charged from longs (buyers) when demanding more leverage. However, when the situation is reversed while shorts (sellers) are over-leveraged, the funding rate goes negative, and they become the ones paying the fee.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/61739825-7e38-46d3-b7b8-1c83496f157e.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin perpetual futures 8-hour funding rate. Source: Bybt<\/em><\/figcaption><\/figure>\n<p>As displayed above, the funding rate has been mostly flat since May 19. Had there been a massive surge for shorting demand, the indicator would have reflected the move.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_options_put-to-call_ratio_remains_bullish\"><\/span>The options put-to-call ratio remains bullish<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The call (buy) option provides its buyer with upside price protection, and the put (sell) does the opposite. This means traders aiming for neutral-to-bearish strategies will typically rely on put options. On the other hand, call options are more commonly used for bullish positions.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-06\/6d195509-cbd2-4555-a18f-76ad1bd6b5b5.png\"><figcaption style=\"text-align: center;\"><em>Aggregate Bitcoin put-to-call options ratio. Source: Cryptorank.io<\/em><\/figcaption><\/figure>\n<p>Take notice of how the neutral-to-bullish call options outnumber the protective puts by nearly 90%. Had professional traders and whales been anticipating a market crash, this ratio would have been positively impacted.<\/p>\n<p>Investors should not make trading decisions based on a single indicator as the remaining markets and exchanges may not corroborate it. For now, there is absolutely no indication that heavy players are betting on Bitcoin short positions.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>author<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/crypto-twitter-says-traders-are-short-bitcoin-but-data-shows-otherwise\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Crypto Twitter says traders are short Bitcoin, but data shows otherwise &#8221; Margin trading allows investors to borrow stablecoins or cryptocurrency to leverage their position and improve the expected return. For example, borrowing Tether (USDT) will allow one to buy Bitcoin, thus increasing their Bitcoin (BTC) long position in.\u00a0 Investors can also borrow BTC&#8230;<\/p>\n","protected":false},"author":1,"featured_media":268902,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDYvOWVjMmVlNTItZTJmZC00ZDBjLWIwMDgtZjMzOWUxYjUyZTZkLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74972,81209,74937,74863,74860,75012,74939,73785],"class_list":["post-268901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-options","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-derivatives","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/268901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=268901"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/268901\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/268902"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=268901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=268901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=268901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}