Your Bitfinex chart is lying to you. Do you know how?
PRICE ACTION
This chart is wrong; and it is important you understand why!
Let’s start with the obvious part. Just before close of the 1D candle; news dropped about the NY Attorney General going after crypto. No, this isn’t an episode of Billions; but this was big news. Bitfinex and Tether are being investigated!
And so, the price plummeted...all the way down to bounce just above the 5000 key support. And by the time the daily candle had closed; price was already back up +$200. Over the next 4-hour candle; almost all the price erosion had been covered – as price recovered almost 10%. PROOF THAT THE BEAR MARKET IS OVER!
The only problem is that this is nothing more than a calculation that needs adjustment.
BTCUSD – and in fact all USD pairs on Bitfinex – are priced with a tether premium built in. There remains a lot of debate and speculation about whether Bitfinex is using Tether in its pairings – but the underlying value appropriated to it by the market is exactly that. The market assumes USD pairs on Bitfinex are Tether based.
So, what happened is very simple...
At the first sign of problems; retail investors went with the flow and sold off BTC and moved into their stablecoin of choice. For most, that’s USDT. As the news developed, fear of the value of USDT dropping began to flood into the market. People wanted out of Tether. Supply & Demand dictates that events like this must lower the price of the unwanted asset (i.e. Tether). So, we saw Tether sustain a fall of 6-9% over the 5 hours post news breaking. Before finally stabilizing at around 95c per 1 USDT.
As for the rest of the rise in Bitcoin? Again, Supply & Demand. As people exited Tether – most people are unable to actually exit into Fiat value (something I am sure iFinex are very happy about...) and so their only real option was to move back into the key coins (BTC,LTC,ETH,etc).
If you want to know your true value; a great little trick is to add *KRAKEN:USDTUSD onto your chart to multiple the value against the value of Tether at the present time. It should look something like:
BITFINEX:BTCUSD*KRAKEN:USDTUSD
Looks weird, but at least it will be accurate and give you a traders edge!
OPEN INTERESTS (BITFINEX)
Long: 1.36 Days
Short: 2.10 Days
RELATIVE STRENGTHS
ON BALANCE VOLUME
KEY PRICE AREAS
Resistance: 5350, 5677 (52W MA), 6200
Support: 5113 (28D MA), 4850, 4200
PREVIOUS ANALYSIS
This chart is wrong; and it is important you understand why!
Let’s start with the obvious part. Just before close of the 1D candle; news dropped about the NY Attorney General going after crypto. No, this isn’t an episode of Billions; but this was big news. Bitfinex and Tether are being investigated!
And so, the price plummeted...all the way down to bounce just above the 5000 key support. And by the time the daily candle had closed; price was already back up +$200. Over the next 4-hour candle; almost all the price erosion had been covered – as price recovered almost 10%. PROOF THAT THE BEAR MARKET IS OVER!
The only problem is that this is nothing more than a calculation that needs adjustment.
BTCUSD – and in fact all USD pairs on Bitfinex – are priced with a tether premium built in. There remains a lot of debate and speculation about whether Bitfinex is using Tether in its pairings – but the underlying value appropriated to it by the market is exactly that. The market assumes USD pairs on Bitfinex are Tether based.
So, what happened is very simple...
At the first sign of problems; retail investors went with the flow and sold off BTC and moved into their stablecoin of choice. For most, that’s USDT. As the news developed, fear of the value of USDT dropping began to flood into the market. People wanted out of Tether. Supply & Demand dictates that events like this must lower the price of the unwanted asset (i.e. Tether). So, we saw Tether sustain a fall of 6-9% over the 5 hours post news breaking. Before finally stabilizing at around 95c per 1 USDT.
As for the rest of the rise in Bitcoin? Again, Supply & Demand. As people exited Tether – most people are unable to actually exit into Fiat value (something I am sure iFinex are very happy about...) and so their only real option was to move back into the key coins (BTC,LTC,ETH,etc).
If you want to know your true value; a great little trick is to add *KRAKEN:USDTUSD onto your chart to multiple the value against the value of Tether at the present time. It should look something like:
BITFINEX:BTCUSD*KRAKEN:USDTUSD
Looks weird, but at least it will be accurate and give you a traders edge!
OPEN INTERESTS (BITFINEX)
Long: 1.36 Days
Short: 2.10 Days
RELATIVE STRENGTHS
- Micro (5m): Weak
- Short Term (4h): Oversold
- Mid Term (1D): Lower Low
- Macro (1W): Hidden Bearish
ON BALANCE VOLUME
- Mid Term (1D): Falling
- Macro (1W): Falling
KEY PRICE AREAS
Resistance: 5350, 5677 (52W MA), 6200
Support: 5113 (28D MA), 4850, 4200
PREVIOUS ANALYSIS
BINANCE
COINBASE
KRAKEN
BITMEX
BITFINEX:BTCUSD*KRAKEN:USDTUSD