BTC Shorts Increase 50% As $100m Tether Moves To Bitfinex

Published in

The Cryptoverse

5 min readSep 3, 2018

On Today’s Episode of The Cryptoverse…

I would like to address all the BTC holders out there and bring to your awareness some information that has significant potential to affect the Bitcoin price.

While I cannot provide financial advice, I can bring to your awareness certain opportunities or risks so that you can then make more informed decisions.

So that is the goal of today’s video.

Let’s do the TLDR and then dig a bit deeper.

There’s been a significant increase in Bitcoin short positions at the same time that $100m of Tether was transferred to Bitfinex.

Episode Transcript & Notes

Now let’s unpack and interpret exactly what that could mean for our BTC investments and verify whether it’s true.

This all kicked off when Ran Neu-Ner posted this Tweet which says:

So what do we always do when someone makes a claim about reality? We don’t blindly trust it, we see if we can verify it for ourselves.

Part 1 I was able to verify myself:

Live stock, index, futures, Forex and Bitcoin charts on TradingView

TradingView UK. Interactive financial charts for analysis and generating trading ideas on TradingView!

uk.tradingview.com

Here’s the BTCUSD Shorts on Bitfinex on the 1H chart.

At 1 AM on Sunday the 2nd of September the shorts were way down here at the lowest point in the last 30 days.

And then without warning boom. If we measure this I think it measured more than a 50% increase…

And this happened over a few short hours, pardon the pun.

So that’s a fact. Bitcoin shorts shot up massively, meaning someone or a whole bunch of people are betting Bitcoin’s price in USD is about to go down.

If it goes down they make a profit, if it continues to go up, they make a loss.

Now onto claim number 2, $100m of Tether was moved to Bitfinex…

Ran shows a screenshot of a Tether transaction on the Omni Network:

https://twitter.com/cryptoSqueeze/status/1036190362170081280/photo/1

I managed to find that transaction using an Omni block explorer which I’ll show you here…

https://omniexplorer.info/address/1NTMakcgVwQpMdGxRQnFKyb3G1FAJysSfz

Yes, this transaction shows $100m of Tether moving from one address to another HOWEVER, what I cannot verify is whether this address receiving the money belongs to Bitfinex.

I attempted to verify this using my own Bitfinex account, but because I’m not verified they won’t let me deposit any Tether.

My intention was to see if I could match up my Bitfinex Tether deposit address with the one here.

If you have a fully verified Bitfinex account you can attempt to perform this verification for yourself. I’ll put a link to this transaction in the sources at the end.

If we pop back to the charts for a second…

https://uk.tradingview.com/chart/9Ly0ynVv/

This increase in shorts adds up to about $70m…

The question is, while these two amounts are similar, are they the same money or is this just a big coincidence that is causing us to see things that aren’t there?

In order to answer that question I looked at the timing of the two events.

If we pop back to the Tether transaction…

https://omniexplorer.info/address/1NTMakcgVwQpMdGxRQnFKyb3G1FAJysSfz

The timestamp says 5:05 pm on the 2nd of September….

That is several hours after the big increase in shorts.

Again we can’t actually verify this, but what it looks like is someone moving a lot of Tether to Bitfinex in order to make sure they have enough collateral to cover the big short they just put on.

So what does this mean then?

Well, $100m isn’t a lot compared to the $4b of daily volume Bitcoin is currently doing, although it’s a lot of volume in one go.

Twitter user @CryptoSqueeze commented on this as well…

They do have 103,000 twitter followers so they’ve got some influence there.

What affect this will all have very much depends on how the market interprets the situation.

In fact, it’s entirely possible that this is an attempt at manipulating the market psychologically.

Here’s what I mean by that.

If the market interprets this as a high risk that Bitcoin is going to fall, that will cause people to sell and cause the very fall they were afraid of, and thus the short seller makes a profit on the fear their trade created.

However, if the market is now largely full of hardcore hodlers and we don’t react to this at all, Bitcoin may very well continue to rise.

If it continues to rise there will come a point where this short seller either pulls their trade off the table voluntarily or reaches their margin limit and gets liquidated.

Either way, the downward pressure will be released right at the time when Bitcoin is rising… making it rise even faster.

I personally think that placing a $70m short sell on Bitcoin right now is unwise.

However, I do think that we will be revisiting and retesting $6k before we see the next bull run in the final quarter of this year.

If I flip briefly to my BTCUSD daily chart

https://uk.tradingview.com/chart/9Ly0ynVv/

We are due for a cycle high around the 15th of September, then we have the big ETF decision on the 30th. Maybe that’s what this short seller is betting on.

Or maybe they also think we are going to retest $6k and are just going to ride Bitcoin down to there and then take profit.

Either way, I am not letting this information influence my strategy. I’m keeping all my positions in place until further notice.

But as always, you’ll have to decide what to do for yourself.

I just hope that the decision you do make comes with a greater degree of confidence having tuned in to this episode of The Cryptoverse.

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