MAY 30, 2022 • 6 Min Read
[Excerpt from a Delphi Insights Report]
The below chart shows price action from May 25 – May 26, focusing on the attempted range breakdown on May 26. BTC price, volume, and profiles are located in the top pane. In the bottom three panes, you will find experimental Exochart indicators designed to track open interest, net longs, and net shorts. In other words, it estimates the net amount of futures contracts entering or leaving the market. These types of indicators only work with exchanges that report OI data rapidly, and even then it is not perfect and will not always reflect true market positioning, so it is important to keep that in mind.
When looking at OI, NL, and NS from May 26th, we can see Bybit OI increasing steadily while BTC price rapidly declined from $30K to $28K. In addition to increasing OI, we can see a relatively flat trajectory of NL, meaning that not many new buyers were responsible for the increase in OI seen above. In fact, the tail end of this downside move was met with a large decrease in NL, indicating the forced closure/liquidation of long positions.
Looking above we can see the culprit; net shorts increased steadily throughout the attempted range breakdown move. BTCUSD price reached its lowest point as OI and NS levels their highest daily levels. What happens next is quite interesting; NS continue to increase rapidly as NL continue derisking with OI remaining relatively flat at its new elevated level. This means that sellers have piled into the lows, and are now fighting the move as bitcoin returns into the overlapping value area defined previously. This is exactly the type of fuel that mean reversion traders are looking to fade/exploit.
The above Bybit dynamic is additional evidence to the above conclusion; “it becomes clear that this move to the downside was fueled by aggressive selling and long liquidations.”
[Excerpt from a Delphi Pro Report]
State of Global Macro
Just writing Global Macro Investor over the weekend and as ever, I like to share a few insights.
The narrative on Twitter is that tech is dead. The reality is that the Nasdaq has just reverted back to trend – 150 week moving average 1/
—Raoul Pal (@RaoulGMI) May 30, 2022
Market Updates by QCP Capital
1/ Hello everyone! We are back with another market update for 29 May 2022. Let’s begin 🧵
— QCP Capital (@QCPCapital) May 29, 2022
New ETH-Margined Contracts on BitMEX
⌛24 hours to go⌛
Three new ETH-margined contracts are coming to BitMEX:
Are you ready?
— BitMEX (@BitMEX) May 30, 2022
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