Hack To Profit From Shorting On Bitfinex
I thought I'd share something I've noticed on Bitfinex. In the 'Funding' area, when ever a lending rate goes unusually high, it means that particular crypto is being shorted in large enough amounts to push the lending rates up.
For example, NEO lending on Bitfinex is paying .24% per day interest which is up 2475% since yesterday. So to me this says everyone thinks its overvalued and are taking short positions.
The reason for this is when you margin trade long, you borrow USD, however when you margin trade short you borrow the underlying currency.
And knowing this, you can get some good shorting tips by watching the lending rates on Bitfinex.
Since posting this NEO has dropped 5% for a tidy profit. I've set some stops but will see if I can get more from here. The NEO funding rate has halved to .11% a day so other traders must be closing out positions as well.