A derivative indicator I have used for many years to analyze Bitcoin is the BITFINEX:BTCUSDLONGS symbol on Tradingview which displays the number of Bitcoins held in Leveraged Long positions on the Bitfinex platform. This is an indicator of the aggregate long positions held on margin on the platform. It can be used to see what speculative position holders are doing.
Recently, during this run up in the price of INDEX:BTCUSD it seems that the Leveraged positions have begun to unwind by taking profit. They are down -23.5% as of today from the start of November 2023.
Analyzing this chart is different to On-Chain Analysis because the Bitcoin involved are all stored internally at Bitfinex. No new Bitcoin are created (because they cannot be) by taking these positions. Rather the Bitcoin that are custodied on Bitfinex and put up for the ability for other traders to borrow and the owners to earn interest are involved in the count.
A few takeaways:
After months of holding leveraged long positions these traders are taking their profits into this move.
By having less exposure on margin the risk of a liquidation event (and liquidation candle) is diminished.
Leveraged Long positions are net negative meaning that leveraged positions are not the cause of this upward move.
«Leveraged Long positions are net negative meaning that leveraged positions are not the cause of this upward move.» Ok, so then what's driving the market instead?
The top of this cycle is 300k USD for anyone wondering, then it will flash crash to nothing and recover
bulcsuv
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Late 2020 early 2021, there was a positive coorelation, then there was negative coorelation. The last time leveraged longs sold off in the summer of 21, the price has risen. I fail to see any predictive value on this.
atkinsonjack0
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Interest rates say hi
tanil_bandara
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they will open longs again after 50K, That's how FOMO works