On Sunday, a trader on Bitfinex claimed, not liquidated, 20,000 Bitcoin (BTC) worth of shorts — a position that was collateralized by over $200,000,000 worth of the cryptocurrency if unlevered. It is important to note that prior to the claim, there was a mass inflow of Bitcoin onto Bitfinex.
For those unaware of the complexities of Bitfinex’s long-short trading system, the “claim” means that the trader (assumed to be one entity due to the speed of the claim) used funds in his/her/their margin wallet to settle the short. Unlike liquidations, which happens when shorts or longs are forced to close their positions after a large move, all this activity occurs off the order book. As Bitfinex writes:
"Claiming a position is essentially converting from a margin trade into an exchange trade; closing the position by buying it yourself and settling your funding costs to the lender. Because of this, there is no trading activity on the order book."
Due to this, the number of BTC shorts on Bitfinex fell to 9,686 BTC, which is a far cry from the 30,000 BTC that the figure was sitting at prior to this claim. What do analysts have to say of this movement in the market, which seemingly didn’t lead to a direct bout of buying or selling pressure? Read More at EWN...