$260mil longs liquidated in minutes, most of them in BFX. It seems that around 75 longs each for 1mil to 1.26mil belong to 1 person. This is quite a loss. May the Lord has mercy on this n00b soul. And this is why we are in a bear market. When we have even one such whale fool to buy high and sell low, all bullish scenarios go south.
That would make me feel a little bit less-bad about my own losses, which were assuredly much smaller! But I doubt it was a n00b.
My theory—obviously quite a speculative hypothesis, FWIW:
There are always people out there who want to manipulate the market in either direction. And right now, there must be an awful lot of rich people getting desperate to push BTC up—just as there are other rich people determined to hold it down for now, maybe even to break it. Much of my own speculation these past few months has been about
rich people who lose money in other ways when BTC is too low. There are now stocks, funds, etc. that crash when BTC crashes. The market is now complicated, with many moving parts.
The resources needed to open $75–95 million in leveraged longs are grossly inadequate to move such a big market by yourself. But I think that it should more than suffice to give it a big nudge—to build momentum, and to help building momentum, with the probable objective of pushing it to a short squeeze as in the spectacular long-squeeze-then-short-squeeze scenario last year.
I am not so naïve as to imagine that simply buying $75–95 million in BTC would have any significant impact. But this is what I think, whenever I see sudden bullish candlesticks out of nowhere:
Pump volatility—I’ve watched order books during periods of high volatility. I noticed what market maker bots do when volatility spikes. Sometimes, the order book near mid-market gets so thin that with tens of millions of dollars and a good quant bot, I’d think that you could generate and momentarily support some
brilliant giant green candlesticks all by yourself. Indeed, this is what I think to myself whenever I see those sudden, extremely rapid jumps pop up out of nowhere.
Which is more likely: A whale on BFX getting FOMO, or a whale on BFX playing a high-risk gambit to try to ignite some FOMO? If he (or
they—if a firm?) hedged by shorting the perp at the top of his own pump and/or with options, then it would not be high-risk, either. What sophisticated trader with that much money takes that big a risk, without hedging?
If so, a bullish manipulator just got slapped down hard by bearish manipulators. Albeit probably not too hard, if adequately hedged.
All markets are wildly manipulated at all times, in all directions by parties with competing interests; thus, such a scenario does not seem far-fetched to me.
On-topic. But highly speculative, as suits the Speculation forum. Just thinking aloud, “Who takes that kind of risk, and why?” FWIW.