Bitcoin bubble is deflating ... how do I short it?

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
Seems the Bitcoin bubble ("hype cycle") is now deflating rapidly following the gains of 2017. I'm with Luno, but do not see any options to short Bitcoin. Is this possible in South Africa?
 

etienne_marais

Executive Member
Joined
Mar 16, 2008
Messages
6,522
Some of the commercial FX trading platforms have it for Bitcoin, you can also try Plus500 (has web interface).

You will be helping the demise though.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
7,154
Just sign up on a major exchange that supports margin trading - quite easy generally. If you don't have any holding you will have to buy BTC locally to transfer in. However, be very careful. Unless you know what you're doing you will get burned. And if you're calling it wrong, you will also get wiped out. Plenty of punters thought the same the last time BTC was in $6-7k range and it reversed back up to over $10k for a period which wiped them out.
 

SaiyanZ

Executive Member
Joined
Jun 5, 2008
Messages
7,483
Shorting this market is a dangerous game. Right now a lot of people are shorting BTC which actually might make us go up because they all need to buy BTC to close their positions. When most think the market is going to go down further, it probably won't. People have also already sold and are now waiting with cash to buy. People who have shorted are waiting for it to drop so that they can buy.

You need people to sell for the price to drop but who is left to sell when everyone who wanted to sell has already sold?
 

biometrics

Honorary Master
Joined
Aug 7, 2003
Messages
70,345
Shorting this market is a dangerous game. Right now a lot of people are shorting BTC which actually might make us go up because they all need to buy BTC to close their positions. When most think the market is going to go down further, it probably won't. People have also already sold and are now waiting with cash to buy. People who have shorted are waiting for it to drop so that they can buy.

You need people to sell for the price to drop but who is left to sell when everyone who wanted to sell has already sold?
/mind loops
 

AstroTurf

Lucky Shot
Joined
May 13, 2010
Messages
27,343
I sold most of my Bitcoin beginning January (good profit) Bought R500 beginning of this month. Been between R460 to R560 since. Not really what I would call deflating...
 

Splinter

Honorary Master
Joined
Oct 14, 2011
Messages
18,965
Shorting this market is a dangerous game. Right now a lot of people are shorting BTC which actually might make us go up because they all need to buy BTC to close their positions. When most think the market is going to go down further, it probably won't. People have also already sold and are now waiting with cash to buy. People who have shorted are waiting for it to drop so that they can buy.

You need people to sell for the price to drop but who is left to sell when everyone who wanted to sell has already sold?
I think the number of people willing to pump money into this, just to bump up the price, to make some gains from the sheep jumping in, are now running scared. The whole thing is on a precipice.

Will be interesting to watch - whatever happens.
 

SaiyanZ

Executive Member
Joined
Jun 5, 2008
Messages
7,483
I think the number of people willing to pump money into this, just to bump up the price, to make some gains from the sheep jumping in, are now running scared. The whole thing is on a precipice.

Will be interesting to watch - whatever happens.
Yeah we are kind of in no-mans-land right now. Though we are also close to a 3 month low. Shorting now is like buying when the price was at $19k after it went up for 3 months.

I suppose one could short and make small 1-2% gains but shorting and waiting for a drop to $6k is too risky I think.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
7,154
Yeah we are kind of in no-mans-land right now. Though we are also close to a 3 month low. Shorting now is like buying when the price was at $19k after it went up for 3 months.

I suppose one could short and make small 1-2% gains but shorting and waiting for a drop to $6k is too risky I think.
This is true, shorting now would be like going long at $20k - unless you're absolutely 100% sure it's still going down.

IMHO it might still run down into the $5k range, but who knows? On the balance of probability and price history, probably not though. But who knows? This is Bitcoin. Anything can happen.
 

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
This is true, shorting now would be like going long at $20k - unless you're absolutely 100% sure it's still going down.

IMHO it might still run down into the $5k range, but who knows? On the balance of probability and price history, probably not though. But who knows? This is Bitcoin. Anything can happen.


Bitcoin was $8k when this post was started yesterday. It has already dropped 6% to $7520. Not to be scoffed at.
 

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
Created a demo account yesterday on Plus500 and made a virtual profit of R‪113,778.56. :)
 

cerebus

Honorary Master
Joined
Nov 5, 2007
Messages
35,903
Shorting is very dangerous, you really need to know what you're doing. If the price goes up sharply you're in for much more than you bargained on spending.
 

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
Shorting is very dangerous, you really need to know what you're doing. If the price goes up sharply you're in for much more than you bargained on spending.
Agree. You need hair on your teeth to do spread-betting, like on Plus500. Only recommended for "gamblers". That is due to the high gearing applied on those sites. Not sure if normal Futures will be less risky.

Found the following resource for shorting options: https://www.investopedia.com/news/short-bitcoin/
 
Last edited:

garp

Executive Member
Joined
Aug 2, 2004
Messages
7,154
Bitcoin was $8k when this post was started yesterday. It has already dropped 6% to $7520. Not to be scoffed at.
True. And tomorrow it could just as well be back at $9k or sitting at $6k. Shorting now is basically gambling. Nice returns if you guess right.
 

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
True. And tomorrow it could just as well be back at $9k or sitting at $6k. Shorting now is basically gambling. Nice returns if you guess right.
In the near term, prices are random or chaotic. Many experts have however indicated that they see cryptocurrencies in the middle of a classic hype cycle. The hype bubble is created by the herd stampeding towards a new technology. Then the herd is disillusioned, followed by a decline in interest. During the decline there are normally one or more bull periods, but the basic trend is downwards. Gartner describes this hype cycle quite well (see "blockchain").

Nothing is guaranteed however, and nobody knows when the next phase of more sober adoption of the technology (cryptocurrencies) will commence.

Gartner's Hype Cycle, 2017.jpg
 
Last edited:

dude007

Active Member
Joined
Aug 8, 2009
Messages
36
Yeah we are kind of in no-mans-land right now. Though we are also close to a 3 month low. Shorting now is like buying when the price was at $19k after it went up for 3 months.

I suppose one could short and make small 1-2% gains but shorting and waiting for a drop to $6k is too risky I think.

With the steady deflation of the hype bubble, which started in Dec, we are likely to see bitcoin (and other crypto currencies) drop much lower than 8k. It is already trading in the 6k range today (12+ % down).
 

kfc4unme

Well-Known Member
Joined
Dec 27, 2016
Messages
373
Shorting is very dangerous, you really need to know what you're doing. If the price goes up sharply you're in for much more than you bargained on spending.
No expert but in general, surly shorting is as dangerous as going long. If you using margin while shorting and price goes up you screwed. If you using margin while going long and price goes down you are screwed.
 
Top