Latest from the Quantamize Blog

What Short and Long BTC Transactions Tell Us About Yesterday's Sell-Off

Nov 15, 2018


  • After yesterday's cryptocurrency sell-off that saw the sector shed as much as USD$28 billion in total market capitalization, we take a look at short and long transaction data on popular crypto exchange Bitfinex for the BTC/USD trading pair to understand how investors traded through the dip, as can be seen in the charts below. 
  • Through the middle of October, long BTC/USD transactions on Bitfinex saw a steep drop off, falling 31% from 29,140.94 long transactions on October 8th to 20,098 long transactions on October 19th -- over the same period, short BTC/USD transactions rose 16.42% from 30,737 to 35,783.
  • During this period, BTC/USD saw a dip from USD$6,630.40 on October 10th to USD$6,239.0 on October 11th, -- the trading pair’s price quickly, however, with BTC/USD trading at USD$6,525.10 by October 19th’s close.
  • Leading up to yesterday's cryptocurrency sell-off, BTC/USD on Bitfinex appeared to be picking up bullish support. From its low of 20,098 long BTC/USD transactions on October 19th, long transactions on Bitfinex steadily gained traction, increasing 27.34% to 25,593 long transactions on November 7th -- meanwhile, BTC/USD short transactions on Bitfinex fell 41.27% to 21,017 on November 7th.  
  • Over this period, BTC/USD on Bitfinex was little changed from USD$6525.10 on October 19th to USD$6,570.50 on November 7th.
  • As yesterday's cryptocurrency sell-off ensued, short BTC/USD transactions on Bitfinex spiked 28.75% from 19,973 short transactions by November 13th's close to 25,716 short transactions by yesterday’s close. Long BTC/USD transactions on Bitfinex, however, also increased, from 24,106  transactions by November 13th's close to 25,872 long transactions by yesterday’s close.
  • If investors continue to take long BTC/USD positions at the current attractive price levels (relative to 2018), could a short squeeze be coming that will drive the price of BTC/USD higher?  As is the norm in cryptocurrency markets, only time will tell...

Long BTC/USD Transactions on Bitfinex through 1-Year

Short BTC/USD Transactions on Bitfinex through 1-Year

Source: TradingView, both charts