Brainstorming
This is a back-of-the-envelop analysis of the correlation between Bitfinex margin long positions and BTC price. My intuition is that a more disciplined analysis of Bitfinex margin positions, crypto exchange flows, margin funding rates, and changes in something like the SPY ETF could yield a predictive model.
There appears to be some relationship between these two data series, but only when there is a large change in the Bitfinex margin positions. In 2021, generally, margin longs correlate with BTC price.
If margin longs were to decrease, BTC price would likely fall due to selling pressure.
Again, this is a back-of-the-envelop analysis. Broad market sentiment likely influences the Bitfinex long and short margin positions. So, the correlation will not be stable. Watching changes in the Bitfinex margin longs may help forecast BTC price... but this has not been proven in this analysis.
I do have a bearish bias at this time.
More to come as I continue to think about this. Thoughts? Comments?
This is a back-of-the-envelop analysis of the correlation between Bitfinex margin long positions and BTC price. My intuition is that a more disciplined analysis of Bitfinex margin positions, crypto exchange flows, margin funding rates, and changes in something like the SPY ETF could yield a predictive model.
There appears to be some relationship between these two data series, but only when there is a large change in the Bitfinex margin positions. In 2021, generally, margin longs correlate with BTC price.
If margin longs were to decrease, BTC price would likely fall due to selling pressure.
Again, this is a back-of-the-envelop analysis. Broad market sentiment likely influences the Bitfinex long and short margin positions. So, the correlation will not be stable. Watching changes in the Bitfinex margin longs may help forecast BTC price... but this has not been proven in this analysis.
I do have a bearish bias at this time.
More to come as I continue to think about this. Thoughts? Comments?
Comment:
You may want to stretch the date range for easier reading.
Comment:
FYI, I posted a "Trade Active" update to this idea. I deleted it. This is just a brainstorming post. I will track progress on the main chart for this concept:
