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For some reason, Bitfinex longs forare dominating. Almost 90% of all margin traders are longing ETH on the exchange.
The overwhelming amount of longs for ETH has some speculating that we could see a massive long squeeze shortly—or maybe these traders know something the rest of us don’t. There is confusion over why Bitfinex margin trading is skewing so overwhelmingly towards margin-longs.
At the time of writing, close to 90% of margin traders are now long on Bitfinex, totaling some $314M. On BitMEX, only 47% are long but the volume is many times smaller than Bitfinex.
According to lowstrife (@strife), some 1.975M ETH was margin-long on Bitfinex alone. That’s about 1.8% of the circulating supply.
1.975 million ETH (1.8% of total circulating supply) is now marginlong on Bitfinex. Just Bitfinex.
+250k just got filled over the last 4 hours. pic.twitter.com/xOOrxNR8gw
— lowstrife (@lowstrife) April 10, 2020
These longs have stayed despite the relatively anemic price movement as(BTC) continues to bleed lower. The majority of BTC margin calls, 61% at the time of writing, are long as well.
Despite the S&P 500 pushing higher today by 1.5% at the time of writing, Bitcoin has not followed. The leading cryptocurrency has fallen below the $7,000 price point and is currently down 5.25% on the daily. Perhaps traders are expecting BTC and ETH to follow traditional financial markets today which, thus far, has not happened.
The overwhelming amount of margin-longs on Bitfinex has caught the attention of traders. Some are speculating that ETH has formed a long-term bottom. Trading volume plummeted in March and price activity has been choppy since but may be bottoming out. Still, others are seeing this all merely as a ploy to squeeze margin-longs. The macroeconomic outlook continues to cause unease.
As of now, the annualized interest rate for ETH on Coinlend is at a stunning 197%. The spike may be related to the margin-longs for ETH on Bitfinex.
Many traders are opting to wait on the sidelines to see how this plays out. There is also some speculation that this is a run-up to the release of ‘phase 0’ of ETH 2.0, expected to be rolled out in July. It should be noted, however, that even with the release of ‘phase 0,’ Blockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless... More 2.0 won’t be fully functional for many years.
Perhaps this will be the beginning of Ethereum leading the market for a short while instead of Bitcoin.
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