Bitfinex-Bitstamp Premium/Discounts

[dragononcrypto]

Source: https://www.tradingview.com/chart/BTCUSD/IR9yF6C0-Past-Bitfinex-Bitstamp-Premium-Discounts/



April 2013 – Bitfinex was very illiquid back then
Nov 2013 – At the top of on the 2013 Bubble
Feb 2014 – Mt. Gox shutdown
Jan 2015 – 2015 Bear market bottom
Aug 2015 – Final capitulation. Cascading margin calls on BFX
Aug 2016 – Bitfinex Hack
April 2017 – Bitfinex-Tether withdrawal issues premium kept getting higher. Bitfinex users were losing, everyone else was gaining.
May 2017 – When the issues stopped and prices started declining Bitfinex had a discount as there was a huge demand for Tethers.
Dec 2018 – Arbitrage still hasn't been mature in the market. This could slowly change with Liquid. I am not aware of anything special other than a big spread after a massive move.
Jan 2018 – Massive anti BFX and Tether campaign. Lots of FUD right before the big crash from 11800 to 5900.
As for the green arrows I have no explanation as to what happened.

Check how much the spread has closed now that liquidity in the market has improved and volatility has gone down.

Large discounts and premiums usually happen near local tops or bottoms. Here we have a similar situation. Why would this time be different?

As people try to short on Bitfinex, they will probably slowly get rekt and hence push the price up. Withdrawal issues are providing more liquidity to the market as people try to move fiat paying risk takers and giving better entries to those that go long.

As people keep buying btc 9.45% and then withdraw it, bears will get keep getting rekt and slowly create a bigger gap as they close. This then creates a cycle were people keep buying on other exchanges to dump on Finex. USDTUSD -0.12% pairs don't really matter that much as they aren't really liquid.

It is worth noting that the last two discounts were bullish for Bitcoin 9.45% and last premium at the exact same range was bearish . My feeling though is that the situation is equivalent to the one in April. To me a really bullish premium would be above 3.5% especially near a local bottom like we are now.

Btw -1.10% do you remember what happened to people who were short on Bitfinex before the hack? They didn't make any money. If Bitfinex gets shut down you will get rekt regardless. If only their USD withdrawals continue, you'll still get rekt as people buy Bitcoin 9.45% and Alts to withdraw. So stop trying to squeeze and extra 2-3% by shorting on Bitfinex, as you are risking to lose a lot more.