$7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k • Hacker News Board

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#21

Post by tgtweak » Sun, Apr 18, 2021, 4:02 PM UTC

This is the reality of leveraged trading.

If you've put up your crypto as collateral on a loan, which you used to buy more crypto (defi), and the price of the asset backing your loan drops below threshold it gets auto liquidated by the holder and your loan is cancelled out. It is automated in all cases with triggers and varying thresholds.

Majority of these are 75-85% ratio which means if btc dips 15-25%, all of those providers liquidate the asset to cover.

Btc has also been holding at 60k for a while while alts are enjoying a rally as they tend to do when everyone leverages their btc gains via the aforementioned to buy into alts.

I'm surprised it didn't crash further but I guess the defi bubble wasn't as big.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#22

Post by fighterpilot » Sun, Apr 18, 2021, 4:02 PM UTC

netrus wrote: post #13

Avalaxy wrote: post #5

Earlier quoted context omitted.

Spread your chances. Buy some now, buy some again later when it crashes even further. If it doesnt crash further, at least you profited from the current dip.

You conveniently left out the scenario where it continues to crash, and OP looses money twice by following your recommendation. It's a casino.

I do like an amended version, which is to buy some now and then unconditionally buy some later, also known as dollar cost averaging.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#23

Post by [deleted] » Sun, Apr 18, 2021, 4:02 PM UTC

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

[deleted]

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#24

Post by hmate9 » Sun, Apr 18, 2021, 4:03 PM UTC

dkdk8283 wrote: post #14

testing_1_2_3_4 wrote: post #2

What's interesting about this is I could see it coming a few days ago. Funding rates on FTX were super high, so you could see people were getting reckless with leverage leading up to this.

FTX?

Its a crpyto exchange

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#25

Post by fighterpilot » Sun, Apr 18, 2021, 4:04 PM UTC

dkdk8283 wrote: post #14

testing_1_2_3_4 wrote: post #2

What's interesting about this is I could see it coming a few days ago. Funding rates on FTX were super high, so you could see people were getting reckless with leverage leading up to this.

FTX?

It's a crypto derivatives exchange serving non US customers.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#26

Post by paulryanrogers » Sun, Apr 18, 2021, 4:04 PM UTC

scsilver wrote: post #17

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

Buy a ticket, dont put in much. Adjust over time. I think the foolish point of view is to look at it as black and white. And whatever you do, don't rob yourself of participation in a meme, fun is not a zero sum game. I regret every time I invest in being smug.

There are other considerations too. Like buying into a tech that's largely backed by dirty energy.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#27

Post by xondono » Sun, Apr 18, 2021, 4:04 PM UTC

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

That’s how bubbles work. IMHO, the best case scenario for crypto is that they are the web companies of the 2000s, so there’s a chance some of them will become an amazingly profitable investment, while most will go the way of pets.com. And that’s the best case.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#28

Post by fny » Sun, Apr 18, 2021, 4:05 PM UTC

polote wrote: post #11

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

How is that different from the stock market ? Maybe you have 'more ideas' but that would not prevent you to be wrong. In both case nobody can predict what will happen next

The difference is that stocks can be "valued" whereas crypto and other assets that lack a revenue stream can only be priced.

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#29

Post by hooande » Sun, Apr 18, 2021, 4:05 PM UTC

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

if you legitimately have no idea, then you don't have any more information than the market does. why would you trade at all?

Re: $7.6B in crypto long positions liquidated in 1 hour as Bitcoin plunges to $52k

#30

Post by patentatt » Sun, Apr 18, 2021, 4:05 PM UTC

polote wrote: post #11

patentatt wrote: post #4

What I hate about Bitcoin is that I have absolutely no idea if this is 1) a good dip to buy, or 2) the start of a much bigger crash. Everything I understand about the topic and the world at large tells me it should be #2, but in retrospect it always winds up being #1. Am I passing up free money today? Or am I smart not to gamble in such an obviously rigged game? Will I look back years from now longingly and wish that…

How is that different from the stock market ? Maybe you have 'more ideas' but that would not prevent you to be wrong. In both case nobody can predict what will happen next

But at least if a stock goes down, there will be some reason you can point to after the fact as a cause. So you can at least make a hypothesis, test it, and see how it turns out. You might be wrong in any number of ways, but there's usually going to be some traceable logical connection between events that happen that you can get information about afterwards (sales go up, sales go down, etc.) and the effect on the price.

With crypto, I don't have that same sense. I buy, it goes up, I'm a visionary genius. I buy, it goes down, I'm a fool. I can't really point to any reason why either scenario happens, no testable hypothesis. Other than a very few events, like the coinbase IPO, that is.