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Comment by willmadden | Hacker News Reader

It wasn’t a simple sell off.

Some not to be named hedge funds that were very long spot started selling aftermarket Friday to test the liquidity while taking out short positions.

Then when they felt the market was illiquid enough after probing it for a few hours, they quickly dumped their long positions, liquidated the leveraged longs, cashed in their shorts, and bought back into the ensuing panic sell off.

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You can’t be long and short at the same time unless you mean long volatility. But then you can’t be both long and short volatility at the same time. Unless you have second derivative options, and there isn’t much liquity in bitcoin first degree options even. So you are net long or short, not both. You can stupidly / unethically / illegaly trade with yourself, but you won’t move the needle through business hours on bitcoin, not with a hedge fund. Shorting bitcoin seemed like the right short term play on Friday, that’s about all.

What? Yes, you can hold long and short positions simultaneously. Yes, there net position went from long to short to long very quickly, but that’s not the point. I can see you aren’t a trader. The point is that they forced the price down when the market depth was thin to liquidate other people’s leveraged long positions to drive the price way down, which triggered panic selling and more liquidations before buying back around the bottom…

Net positions are the ones that count. Going from long to short to long, isn’t being long and short simultaneously, unless you mean to transcend time in the block universe.

Are you able to share how someone could see that this is what happened? I'm not agreeing or disagreeing, I am genuinely interested.

Look at the leaderboards on FTX and Bitfinex while it’s happening. They’ll show you the most profitable recent traders. You won’t see it now but I’m sure there are screenshots on Twitter if you follow trading.

Edit: this is also a great resource to see whales moving funds from their wallets, which telegraphs their trades: https://whale-alert.io/

Also, watch short positions. If you see them ratcheting up when the market is calm and trading is thin, lookout below.

Where is the data on this move?

Both FTX and Bitfinex have leaderboards that show the most profitable traders. The people doing it show up there but only for a short time (and only if they dump open market and not OTC- this was open market).

Also this is a great resource to predict these sorts of manipulations before they happen: https://whale-alert.io/

Also, watch those short positions!

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