"it's all longs"
"no man it was all shorts"
Meanwhile you have access to historical resting bids/asks and open interest for free. On top of that you know that this move down was led by spot selling a retarded amount of coins in no time.
Let's dive in!
1. resting bids getting filled on rising open interest, while spot driving down price. directional exposure is more likely client-long dealer-short. spot selling, perp buying passively.
cvd goes down because, well, the dealer/arb is using market orders to fill the resting bids. if spot is selling off, arb will buy spot, sell perp and later pocket the difference. they are not directionally exposed though, and will just close (sell spot + buy-to-close perp) when price is balanced again
you are concluding that shorts are horny while longs get filled, because you're not watching DOM or heatmap. price corrected you of course.
2. twap on perp that looks like short opening. panic or hedge, I have no idea, but it happens very orderly and gradually, so more likely a hedge.
3. price absorbed the spot seller. panickor or hedgor can unwind. in any case the short was mostly unwound before stage 4.
assumption: 2 + 3 can be as little as an option mm who is short gamma that needs to hedge increasingly negative delta; this is just delta neutral mechanics, not directional exposure. Like I said in 2, the increase (and later decrease) in OI is so orderly and has little impact on price, I'd say it's a likely assumption
4. forever refilling bids held price and pushed it up during illiquid session into resting asks, which were around the same amount as OI that decreased as price moved into it. which were also the same amount as resting bids from (1) and just above their entry price. most reasonable assumption is those early longs closing just above entry here, fueled by some retail weekend shorts.
All data is binance perp, situation is different on hyperliquid or bybit, but since we're looking at specific positioning I don't want aggregated data; you'd have to do this exercise again for each exchange. There is also a lot of noise happening in between these, of course there is some retail bottom shorting and getting rinsed. they are drops in an ocean though
In general I don't think it matters much to watch these flows like a hawk, since you have no idea about what is directional or not. It's still fun to do of course. Even if you are completely wrong, you end up thinking a bit more about the different possibilities of these flows, instead of thinking "OI down CVD down, consulting your trading 101 diagram and concluding that hahaha shorts are entering, we're going so much higher".
I'd say: mark you POI, look at what's happening there specifically, not at flows in between those POI; watch positioning at the extremes and how price moves or doesn't move at those points, that's all you need to do
How to make it:
1) Put Dip Wheeler on notifications
2) Wait for him to post a "Generational Bottom"
3) Right click. Save.
4) Make Instagram account
5) Upload picture
6) Farm followers
7) Farm ads
8) Use profit to twap Fartcoin
50% of your path to success is skill time/effort
the other 50% is your ability to program your nervous system to stop compromising your success with self destructive habit loops that keep you in your state of destructive comfort. hard to do. Its a skill issue in the wrong domain.
A lot of traders get the narrative right. And still lose.
Because they're not trading the reaction — they're trading the event.
Here's why that mindset gets punished more often than rewarded
A thread: 🧵
Why Are You Still Fading Hyperliquid?
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This isn’t another DEX. It’s the everything exchange.
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Had a dream that Trump announced next step in economic war against China is to destroy their key factories and sent strategic bombers to mainland
In response Chinese activated some weird swarms of drones but when I wanted to check the price of Fartcoin internet stopped working