I'm posting my first chart. My bet is a short rotation down to the area marked on the chart.
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Background to the trade thesis: 1. Question marks remain regarding Tether/Finex cash reserve 2. These questions will resurface and trigger a substantial correction
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CoinDesk News, May 16th, 2019: Tether Ordered to Freeze Transfers to Bitfinex by New York Supreme Court
"A New York judge ordered crypto exchange Bitfinex and its affiliated stablecoin issuer Tether to turn over documentation about a loan and a line of credit Tether provided to Bitfinex."
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These notes are just speculation — I'm not stating anything of this to be true. I'm just expressing my thoughts and questions I have. Do your own research.
Anyway, a few days after being sued by the New York Attorney, Bitfinex announced an ICO for a token of its own called LEO.
Contrary to 99% of all ICOs, no white paper for LEO was made public. Instead, a marketing document was released.
Futher, the token sale was not made public. Instead it was reserved for a small group of private investors whose identity haven't been made public.
Bitfinex later announced that: 1. It had sold 100% of its LEO tokens to private investors. 2. All tokens were sold in less than 10 days 3. The token sale raised $1 billion in USDT (Tether) selling 1 LEO token in return for $1 USDT
So, if I understand this right: 1. Bitfinex premined 1 billion LEO tokens (cost: $0) 2. They sold these tokens to private investors and raised $1 billion in USDT. 3. Tether is also a premined coin which is supposed to be a stable coin against the US dollar. Meaning Tether can only issue as many Tether tokens as it is holding in fiat dollar cash reserve. Is this correct?
I don't understand much of these things, so I hope some of the crypto news sources, or someone in the comments, will shed some more light on what's going on here.
I'm bearish until things become more clear — I can't help but feel uneasy about this whole Tether situation. Unless Bitfinex can give real proof that they are sitting on $2 billion of United States Dollar Fiat Cash — I'm bearish for Bitcoin. The history of Bitcoin exchanges going toxic is too serious to ignore. Let's hope this works out well in the end! Bitfinex has been a cornerstone crypto exchange for a number of years.
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We got a strong move up, which was expected. Instead of going long I'm adding to the short position at 7950 with a tight stop. Both position are only a small portion of the acc (1%).
Tomorrow on Monday, Bitfinex will start offering trading with its own token LEO on its platform. It will be very interesting to see how this affects price. If we start to see price going/tipping bearish sideway, then I'm thinking we could see the start of a C-wave down to the trade target 5150. Have a great Sunday!
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So far, so good. I'm still waiting/anticipating for some negative news regarding the NY Attorney to surprise the market and drive a c-wave down to $5150.
I identified $7900 as a key level to watch but it's too early to tell — we could see a major spike up at any moment, imo.
But like I said, this move needs a drive of some sort and I think some news around Tether, could trigger this. So, I'll be watching the crypto news sites for signals.
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Not much has hapened — still waiting for news to start a c-wave down. Any strong impulse to the upside will immediately force me to close the trade. In the meantime — I see no reason to close the trade, and will continue to monitor news channels for updates on the Tether/Finex situation.
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We finally started moving down — albeit slow. I'm still waiting/anticipating negative news regarding Tether/Bitfinex as a drive to really push the c-wave down towards $5150.
Both short positions still active — too early to move stops, so don't do it to avoid getting tagged out if we get a sudden bullish spike. Will keep monitoring news sites.
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I just wanted to mention the possibility of placing a stink bid long down at $6805 with a tight stop loss. In case we get a spike down candle like we did on the 17th of May, that position could then be exited as soon as the bull run up faces resistance around $7500.
I won't do it myself, but I thought it worth to mention the idea in an update.
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Trade closed due to being stopped out. Hope Bitcoin pushes towards 10k now, and that this is not a fake out.
Okay, so Bitfinex and Tether both issued a press release yesterday (22nd of May) regarding the proceeding brought by New York Attorney General's office.
bitfinex.com/posts/369
The gist is that: Hon. Joel M. Cohen of the New York Supreme Court granted an immediate stay of the document demands.
As a consequence, Tether/Bitfinex will only be required, at the moment, to produce documents relevant to the limited issue of:
whether or not the NY Attorney General’s office has jurisdiction over Bitfinex and Tether, a foreign corporation which do not do business in New York state.
All other documents/issues are thus put on hold until this issue is settled.
My interpretation of this situation — and I stress that I'm not a lawyer — is that transparency and clarity from Tether and Bitfinex would have been more bullish
and made the current short trade look less attractive.
In stalling and being reluctant to cooperate (meet the demands of the NY AG) I think things actually look more alarming (bearish).
It remains to be seen how the NY AG will react to this latest ruling.
I do think there is a risk/chance that Tether/Bitfinex is used by the NY AG to set a precedent in terms of how crypto exchanges are
allowed to use stablecoins to back/fund their operations.
If that's the case then the NY AG might not back away so easily.
By the way, if anyone hears or reads any news that could help provide more insight, please share it in the comments below.
Thanks!
undersun
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We are in a huge upward parabolic move - this would be a huge gamble
YourMajesty
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@undersun, You are right. I'm just taking a small position, 1% of my account.
Also, thank you for commenting!
TheCryptAlpha
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@undersun, what goes up must come down, and we all know how hard the thing tanks, So I would not put this trade off the table, If properly entered this thing can not only break down to 5K but break down further.
Hi! Thanks for commenting!
I think you're right — the latest parabola is likely to be corrected...at some point. Maybe now, maybe later.
Times are delicate, this bull market is very young.
Any aggressive selling could easily domino into widespread selloffs.
I'm only shorting bc of the question marks around Tether. I do find it odd that btc would
bull run so aggressively only days after a NY Attorney sues one of the top exchanges.
bitfinex.com/posts/369
The gist is that: Hon. Joel M. Cohen of the New York Supreme Court granted an immediate stay of the document demands.
As a consequence, Tether/Bitfinex will only be required, at the moment, to produce documents relevant to the limited issue of:
whether or not the NY Attorney General’s office has jurisdiction over Bitfinex and Tether, a foreign corporation which do not do business in New York state.
All other documents/issues are thus put on hold until this issue is settled.
My interpretation of this situation — and I stress that I'm not a lawyer — is that transparency and clarity from Tether and Bitfinex would have been more bullish
and made the current short trade look less attractive.
In stalling and being reluctant to cooperate (meet the demands of the NY AG) I think things actually look more alarming (bearish).
It remains to be seen how the NY AG will react to this latest ruling.
I do think there is a risk/chance that Tether/Bitfinex is used by the NY AG to set a precedent in terms of how crypto exchanges are
allowed to use stablecoins to back/fund their operations.
If that's the case then the NY AG might not back away so easily.
By the way, if anyone hears or reads any news that could help provide more insight, please share it in the comments below.
Thanks!