ETHUSD absolutely disgusting closeCommunity discussions
ETHUSD absolutely disgusting close
ETHUSD Also look at the 4 hour chart's SQZMOM indicator. The price has been compression for the last 20 candles, and we are bound to see an upwards or downwards squeeze. I believe a short squeeze is bound to happen over the weekend.ETHUSD extremely bullish if we close the day at 2950 or above
ETHUSD Tom Lee dropped an explanation on the role of market makers in the crypto crash.Here is a breakdown of why market makers were crippled, going beyond the simple one-trade example:
1. Inventory Risk Magnified
The market maker’s business is to buy low (Bid Price) and sell high (Ask Price). They constantly hold a long inventory of assets they want to sell and may hold short inventory (by shorting futures or perpetuals) to hedge their positions.
(Inventory Risk): You buy an asset from Trader A at Price A (the bid price). If the market price suddenly drops before you can sell it to Trader B at Price B (the ask price), the value of the asset in your inventory is now much lower. You must sell it at a loss to clear your books.
The ADL Reality: The ADL triggered forced selling across two million accounts. This created a massive, sudden influx of sell orders with little to no corresponding buy demand. The market didn't just drift down; it plunged instantly (e.g., the stablecoin dropping to 65 cents).
The value of the market makers' vast long inventory (assets they were holding to sell) instantly collapsed, resulting in enormous unrealized and realized losses on their balance sheet.
2. Hedging Failures (Delta-Neutral Risk)
Professional market makers often employ "delta-neutral" strategies to hedge against directional price movements.
They might hold 100 Bitcoin (long inventory) and hedge this risk by shorting 100 Bitcoin worth of futures contracts.
The problem during a cascading liquidation is that the cash market (spot price) and the futures market (derivative price) often decouple wildly as positions are forcibly closed (Source 1.6).
When prices plummeted, their hedges may have failed to cover the entire loss, or they may have incurred severe losses on one side of their hedge that was not perfectly balanced by the other side. This is particularly true when liquidity vanishes, as they cannot adjust their positions quickly enough.
In summary, the ADL was so destructive because it turned the market makers' necessary holding of inventory from a controlled, short-term risk into an unmanageable, large-scale capital loss that created the "hole in their balance sheet".
ETHUSD I read somewhere that the market is crashing because the rate cut odds in December are dropping. I think this is an over reaction from the market as always. I expect we recover from here. But I do believe we are still in the down trend. Be careful from using leverage.
ETHUSD There was a giant wall of bids for BTC at 86k on the Kraken exchange which got filled, giving us the momentum of this reversal.
ETHUSD here we go again, we are going to 3k for a rinse and repeat, pump and dump or whatever you wanna call itETHUSD We just balanced a FVG on the weekly. Where's HollywooodTrades at? I imagine he has something to say about this.
ETHUSD hahahahahhahahahahaha
ETHUSD I know a lot of people are eyeing that preliminary support level at around $2,400-$2500. I could be wrong but something is telling me it's just bait for shorters right now. I think it will get there eventually but after we have another strong move up and everybody is relaxed and back on Moon time.