During my previous analysis, i noticed something (with the help of a member) on Bitmex and the XRP' futures
being traded there. In my previous analysis i already wrote something about that:
XRP' is completely dead lately. Already broke that blue curved line, without even a fight. There is one, maybe an important note, about XRP'. Since the Dec expatriation at Bitmex ended and the March started (which ends at 29-03), the price has simply been dropping (xrp/btc). Like someone is keeping the price at a low point to get max profit on the futures . Now the total amount open intrest, has a value around 40 million. My first thought is, that amount is not enough for such an operation, but they might be doing the same at other exchanges. I don't know, because i only know Bitmex myself.
I know the chart looked a bit bearish (the btc pair), i posted a big bearish wedge myself 3 months ago, but it has not been really dropping. Like a slow steady controlled drop. Could be noise, maybe some of you who know more about this, please share.
The OI' there has dropped the past 2 weeks from 140 mil to 110 mil. These have decreased during the liquidation drops (of course!!). When looking at other alts, the volume
with those is like 50% of the OI up to 200% of the OI. With XRP', the volume
is/was only 15% of the OI'. So in other words, the interests of the market was much higher than all other alts. I don't know how to look back in the history of it, but probably started since the futures
were issues in Dec 2018.
As we can see on the chart on the right, each time a rally happened, the price got pushed down every time and almost just as fast. Not even once we have seen a bull flag
form or whatever. No, simply pushing the price down. The price was clearly being suppressed since the start in Dec. The expiration of these futures
are on the 29th of March. On this day at a set time, the futures
get settled at the price of expiration. So, it had become very likely lately that the price would not go up the past weeks. That it was going to be held at those low levels or being pushed down even more. The reason why they do this until the end, is because the OI is too high compared to the volume
. I checked the order book 2 weeks ago and it showed that the volume
in the order book even with a 500% move up, would not even cover 30% of the OI. So in other words, these people have no other choice than to keep the price suppressed until expiration, because than the broker simply looks what the price is at a certain time, and the differences get paid between winners and losers. So they won't need to buy them back and create a big short squeeze because of the big volume
Now the big question is, HOW did they suppress the price.
1) Did they short XRP' on other exchanges, meaning they have a big bad of short positions there that need to be closed (bought back eventually).
2) Or is XRP' just like Bitcoin
. That the future price of Bitmex XBT' is the big boss in the market and that everything follows the future price.
With the second one, it would mean the market can start fresh again after the expiration without there being too many short positions open. With the first one it would mean, they sold or shorted a lot of XRP' and might need to buy back a lot of them AFTER the expiration finishes. This version, might cause a big buy wave. Normally what whales/pro's do when they have big positions that need to be closed. They use retail money to do this. They simply push through a big resistance/support zone, so stops get triggered and a big buy/sell wave happens that goes in to their buy/sell orders. So there is a chance we see a final dump AFTER the expiration, to liquidate a lot of positions so they can close theirs without moving the market.
When looking at the open longs and shorts on Bifinex, the numbers are lower than on Bitmex, so don't know if it is meaningful. The futures
started on 17 dec 2018, which is where these charts start as well.
I would like to think, XRP' will make a huge rally after the expiration, but my gut tells me, it won't be that easy. A big clue will be, if we see volume
increase a lot after/during the expiration. When volatility
increases, TA is usually very helpful. Just be aware of a shake out.