{"id":512243,"date":"2022-11-19T00:02:35","date_gmt":"2022-11-18T21:02:35","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\/"},"modified":"2022-11-19T00:02:35","modified_gmt":"2022-11-18T21:02:35","slug":"bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\/","title":{"rendered":"# Bitcoin traders increase leverage longs even as crypto critics say BTC is a \u2018pure Ponzi\u2019"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a311c71d0e90\" 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-6a311c71d0e90\" 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-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\/#%E2%80%9D_Bitcoin_traders_increase_leverage_longs_even_as_crypto_critics_say_BTC_is_a_%E2%80%98pure_Ponzi_%E2%80%9C\" >&#8221; Bitcoin traders increase leverage longs even as crypto critics say BTC is a \u2018pure Ponzi\u2019  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\/#Futures_markets_are_in_backwardation_and_this_is_bearish\" >Futures markets are in backwardation and this is bearish<\/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\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\/#The_longs-to-shorts_ratio_shows_a_more_balanced_situation\" >The longs-to-shorts ratio shows a more balanced situation<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Bitcoin_traders_increase_leverage_longs_even_as_crypto_critics_say_BTC_is_a_%E2%80%98pure_Ponzi_%E2%80%9C\"><\/span>&#8221; Bitcoin traders increase leverage longs even as crypto critics say BTC is a \u2018pure Ponzi\u2019  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-887bb764>Bitcoin (BTC) price has tested the $16,000 resistance multiple times since the 25% crash that occurred between Nov. 7 and Nov. 9, and some critics will justify their bearish bias by incorrectly assuming that the failure of FTX exchange should trigger a much broader correction.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">It&#8217;s kind of annoying me that Bitcoin is still selling for $16k-ish, even in the wake of all of this FTX <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a>. I mean I assume the volume is low, but what on earth will it take to properly crush this zombie &#8220;currency&#8221; back to its rightful value of nearly zero?<\/p>\n<p>\u2014 Daniel Knowles (@dlknowles) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/dlknowles\/status\/1593431432071979010?ref_src=twsrc%5Etfw\">November 18, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>For example, Daniel Knowles, a correspondent at The Economist, says the 26th largest tradable asset in the world with a $322 billion market capitalization is \u201castonishingly useless and wasteful.\u201d Knowles also said that \u201cthere is still no logical case for specifically Bitcoin. It&#8217;s pure ponzi.\u201d<\/p>\n<p>If you think it through, for outsiders, Bitcoin\u2019s price is the single most important indicator of success, regardless of its valuation surpassing secular companies such as Nestle (NESN.SW), Bank of America (BAC) and Coca-Cola (KO). <\/p>\n<p>Most people\u2019s need for centralized authority over their money is so entrenched that cryptocurrency exchanges\u2019 success and failure rate becomes the gatekeeper and success benchmark, when in fact, quite the opposite is true. Bitcoin was created as a peer-to-peer monetary transmission network, so exchanges are not synonyms for adoption.<\/p>\n<p>It is worth highlighting that Bitcoin has been trying to break above $17,000 for the past seven days, so there is certainly a lack of <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>etite from buyers above that level. The most likely reason is that investors fear contagion risks, similar to what was seen with Genesis Block, the last FTX-related victim to halt service due to liquidity concerns. According to recent reports, the company announced plans to cease trading and shutter operations.<\/p>\n<p>Bitcoin price is stuck in a downtrend, and it will be hard to shake it, but it\u2019s a fallacy to assume that centralized cryptocurrency exchange failure is the primary reason for Bitcoin\u2019s downtrend or a reflection of its actual value. <\/p>\n<p>Let\u2019s look at crypto derivatives data to understand whether investors remain risk-averse to Bitcoin.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Futures_markets_are_in_backwardation_and_this_is_bearish\"><\/span>Futures markets are in backwardation and this is bearish<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Fixed-month futures contracts usually trade at a slight premium to regular spot markets because sellers demand more money to withhold settlement for longer. Technically known as contango, this situation is not exclusive to crypto assets.<\/p>\n<p>In healthy markets, futures should trade at a 4% to 8% annualized premium, which is enough to compensate for the risks plus the cost of capital.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/6a5edaaf-8734-42db-a7a8-4ccf4b3dcd2d.png\"><figcaption style=\"text-align: center;\"><em>Bitcoin 2-month futures annualized premium. Source: Laevitas.ch<\/em><\/figcaption><\/figure>\n<p>Considering the data above, it is evident that derivatives traders flipped bearish on Nov. 9, as the Bitcoin futures premium entered backwardation, meaning the demand for shorts \u2014 bearish bets \u2014 is extremely high. This data reflects professional traders\u2019 unwillingness to add leveraged long (bull) positions despite the inverted cost.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_longs-to-shorts_ratio_shows_a_more_balanced_situation\"><\/span>The longs-to-shorts ratio shows a more balanced situation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>To exclude externalities that might have solely impacted the quarterly contracts, traders should analyze the top traders\u2019 long-to-short ratio. It gathers data from exchange clients\u2019 positions on the spot, perpetual and fixed-calendar futures contracts, thus better informing on how professional traders are positioned.<\/p>\n<p>There are occasional methodological discrepancies between different exchanges, so readers should monitor changes instead of absolute figures.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/8dcb7fe4-9df3-4fe6-8e72-c3e8c838c7df.png\"><figcaption style=\"text-align: center;\"><em>Exchanges&#8217; top traders Bitcoin long-to-short ratio. Source: Coinglass<\/em><\/figcaption><\/figure>\n<p>Even though Bitcoin failed to break the $17,000 resistance on Nov. 18, professional traders slightly increased their leverage long positions according to the long-to-short indicator. For instance, the Huobi traders\u2019 ratio improved from 0.93 on Nov. 16 and presently stands at 0.99.<\/p>\n<p><strong>Related:\u00a0<em>Crypto Biz, FTX fallout leaves blood in its wake<\/em><\/strong><\/p>\n<p>Similarly, OKX displayed a modest increase in its long-to-short ratio, as the indicator moved from 1.00 to the current 1.04 in two days. Lastly, the metric stood flat near 1.00 at the Binance exchange. Thus, such data show traders did not become bearish after the latest resistance rejection.<\/p>\n<p>Consequently, one should not conclude that the futures backwardation considering the broader analysis of the long-to-short ratio, show no evidence of excessive bearish demand from whales and market makers. <\/p>\n<p>It will likely take some time until investors exclude the potential regulatory and contagion risks caused by FTX and Alameda Research\u2019s downfall. Until then, a sharp recovery for Bitcoin seems unlikely for the short term.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/p>\n<p class=\"post-content__disclaimer\">The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<\/div>\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 News 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\/bitcoin-traders-increase-leverage-longs-even-as-crypto-critics-say-btc-is-a-pure-ponzi\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Bitcoin traders increase leverage longs even as crypto critics say BTC is a \u2018pure Ponzi\u2019 &#8220; Bitcoin (BTC) price has tested the $16,000 resistance multiple times since the 25% crash that occurred between Nov. 7 and Nov. 9, and some critics will justify their bearish bias by incorrectly assuming that the failure of FTX&#8230;<\/p>\n","protected":false},"author":1,"featured_media":512244,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMTEvN2I1MWIwNTYtYWFmZi00MzNlLTkwYzctODhkZjViOTk3ZWIzLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74858,74863,74860,135234,74939,89897,73785],"class_list":["post-512243","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-bitcoin-regulation","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-ftx","tag-market-analysis","tag-sam-bankman-fried","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512243","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=512243"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/512243\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/512244"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=512243"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=512243"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=512243"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}