So after long time I decided to post idea and maybe warn people.
1. So numbers on chart represent market sentiment (opinion) of opened positions in market. Numbers are from Gate.io but its probably almost the same at every exchange or broker. It is a reverse - contrarian indicator, which if it indicates a large rate of long positions, it may mean further decrease (and vice versa). This is due to the assumption that the market will go against retail, which most of the time tries to go against the trend.
Imagine beatiful world where 80% people make money on market and only 20% lose. Yeah It would be nice, but it's not possible. That's why this indicator is practical in mid/long term. Check every broker or exchange and their warning about CFD trading. It's usually 70%-80% traders loosing their money. Sooooo... Quick math: 70% to 80% (sometimes more) traders lose money - 80% to 90% people buying crypto currencies now... That doesnt sound good for buyers right now.
2. Remember end of 2017 and huge shorting of BTC ? Then you probably remember this saying: When your cab driver starts talking about Bitcoin, it’s time to sell... I do not despise taxi drivers or any different job. Every job is important. But when people who are not interested and educated in investing talk about buying some stocks, bitcoin or different assests, investment banks and corporations already sold their parts and waiting for discount.
For example, my aunt (I love her with all my heart), told me today that she is thinking about buying bitcoin to make some money. She is good person, but she barely knows how to use her smartphone. Or my friend (his heart is on right place), asked me how to verify account on crypto exchange because he cant speak english and technology is not his strength. He is former lumberjack and now working as a construction worker. Again they are good people and I love them. But it really worries me, how everyone want to invest in bitcoin and make easy money.
3. I am not saying its impossible to go back 68 000 - 70 000 as previous all time high. But I find it too much risky tu buy now if we dont close above 46 000 - 47 000 area :)
So these are my main issues with Bitcoin and crypto situation right now. I hope you find it interesting :)
Please let me know what you think in comment section. Do you agree or disagree ?
1. So numbers on chart represent market sentiment (opinion) of opened positions in market. Numbers are from Gate.io but its probably almost the same at every exchange or broker. It is a reverse - contrarian indicator, which if it indicates a large rate of long positions, it may mean further decrease (and vice versa). This is due to the assumption that the market will go against retail, which most of the time tries to go against the trend.
Imagine beatiful world where 80% people make money on market and only 20% lose. Yeah It would be nice, but it's not possible. That's why this indicator is practical in mid/long term. Check every broker or exchange and their warning about CFD trading. It's usually 70%-80% traders loosing their money. Sooooo... Quick math: 70% to 80% (sometimes more) traders lose money - 80% to 90% people buying crypto currencies now... That doesnt sound good for buyers right now.
2. Remember end of 2017 and huge shorting of BTC ? Then you probably remember this saying: When your cab driver starts talking about Bitcoin, it’s time to sell... I do not despise taxi drivers or any different job. Every job is important. But when people who are not interested and educated in investing talk about buying some stocks, bitcoin or different assests, investment banks and corporations already sold their parts and waiting for discount.
For example, my aunt (I love her with all my heart), told me today that she is thinking about buying bitcoin to make some money. She is good person, but she barely knows how to use her smartphone. Or my friend (his heart is on right place), asked me how to verify account on crypto exchange because he cant speak english and technology is not his strength. He is former lumberjack and now working as a construction worker. Again they are good people and I love them. But it really worries me, how everyone want to invest in bitcoin and make easy money.
3. I am not saying its impossible to go back 68 000 - 70 000 as previous all time high. But I find it too much risky tu buy now if we dont close above 46 000 - 47 000 area :)
So these are my main issues with Bitcoin and crypto situation right now. I hope you find it interesting :)
Please let me know what you think in comment section. Do you agree or disagree ?