Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
i wish someone could explain to me this in english, I understand that a short is betting that it will go down, long the opposite, but how does it work in detail? can someone give me an example? like they were explaining it to a 5 year old? lol. 
Why does it matter that there are 7300 shorts? because thats a shit ton?
Why does it matter that there are 7300 shorts? because thats a shit ton?
To short bitcoin you are selling coins you don't own. To do this, you have to borrow them.
So 7300 bitcoins shorted are 7300 bitcoins lent out, that at some point have to be returned. And how will those borrowers get the coin to repay the lenders?
You guessed it, they have to buy them.
So that is 7300 coins of future demand sitting there. An what's more, the positions will have liquidation prices or 'stop losses' setup that will initiate a buy above a certain price (to prevent too great a loss). A cascade of such automated liquidations is called a 'short squeeze'.
Now you can (and should) look at the leveraged longs the same way however - they are bought with borrowed USD, so that is $17 million USD in demand to buy USD with BTC, aka sell bitcoin. (That's about about 35,000 at current price if we unrealistically assume no slippage)