Data fails to conclude that Bitfinex shorts are depressing Bitcoin price
A significant surge in Bitfinex short contracts is being attributed to Bitcoin’s current downturn but there are other major factors at play.
One of the most common errors traders make when analyzing cryptocurrency markets is taking an exchanges’ bid and ask data and traded volumes at face value.
There’s really no way to know if the top exchanges inflate their volumes by granting special access.
Even the exchanges themselves have no way to know if a group of users are related or conducting multiple transactions among themselves to inflate prices or volumes.
Therefore, not every wash trade or transaction between related entities has been brainstormed by the exchange or the crypto projects with a foundation or marketing team.