LeMogwai

BFX : Margin Call Cascade Algorythm Explained

BITFINEX:BTCUSD   Bitcoin / Dollar
2673 26 10
What we saw earlier was the bitfinex algorythm in case of margin call cascade.
This is the explanatation of how it work (not official one, just guess).

There is a limit for the margin call cascade of about 10% drop in 1 minute. Then the algo stop market selling the bitcoin , and let the buy order to fill the gap. Then it sell again to the previous limit and repeat the processus until it sold every bitcoin from the margin calls.

I m open to any suggestion or comments

Edit : the begin of the action was due to a single 5k sell order to 575.
LastBattle
2 years ago
Haha great insights! The next time there are such a dump I'll move a bit of fiat to bfx
+1 Reply
KyleFromOhio
2 years ago
Bullish sign?? ... since $5 million in longs got wiped out?
+1 Reply
LeMogwai KyleFromOhio
2 years ago
Downtrend is really strong, i don't see any reason for it goes up from here. Even if it was due to a big sell off 500 has been broken down, soon people will realise that and the sell off will resume.
+1 Reply
ShortThePlanet LeMogwai
2 years ago
to da core!
+3 Reply
capoeira ShortThePlanet
2 years ago
core is what? $100?
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ShortThePlanet capoeira
2 years ago
$100 is just ground :P
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capoeira ShortThePlanet
2 years ago
hahah, that's our permabear
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KyleFromOhio LeMogwai
2 years ago
True.. I keep forgetting this all happened between 1-4AM (in the States).
Reply
LastBattle KyleFromOhio
2 years ago
Its morning in China, so yeah... big dump at this time
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yomofoV PRO
2 years ago
makes a lot of sense
Reply
capoeira
2 years ago
hehe. ou are a smart guy
Reply
flibbr PRO
2 years ago
Good thinking on that algo change to prevent the cascade..
Reply
capoeira
2 years ago
I think this market should be free. random people controling market is much worse than by public organs.
If you want to protect the lenders, set margin call level higher
Reply
LeMogwai capoeira
2 years ago
if you want to protect the lenders : don't allow money lending
+2 Reply
LastBattle LeMogwai
2 years ago
That's why you have banks & loan sharks, no way to avoid greedy bustards from losing money.
Reply
coindev1
2 years ago
algorithm*
Reply
JavaHut
2 years ago
The question is who is waiting at the bottom once the cascade is triggered. Bitfix, friends, others colluders.
Reply
LeMogwai JavaHut
2 years ago
Others trader, and me :)
+1 Reply
nicozi.ziati
2 years ago
Etherum is the reason of the dump.
https://blockchain.info/charts/balance?timespan=30days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=36PrZ1KHYMpqSyAQXSG8VwbUiq2EogxLo2
Reply
nicozi.ziati nicozi.ziati
2 years ago
also https://blog.ethereum.org/2014/08/08/announcement-on-planned-exodus-withdrawal/
Reply
LastBattle nicozi.ziati
2 years ago
We have 15k more to dump.... downside not over
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capoeira nicozi.ziati
2 years ago
lol...people always find a "news" that fits
Reply
myselfbtc
2 years ago
so if someone hit the sell exactly when the algorithm is doing the job it will stop ? and wont liquidate positions ?
Reply
NatePerez
2 years ago
cbcb
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NatePerez
2 years ago
I am so confused by this and very green to understanding charts similar to above. Instead of asking for an explanation of what this means for the future of bitcoin or how you got to you conclusions, I was wondering if anyone could point me to a tutorial/explanation somewhere on the interwebs.
Reply
capoeira NatePerez
2 years ago
it's an algorythm that prevents "supercrashes" caused by margin stop outs...there aren't realy tutorials I guess
Reply
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