Why DeFi Bulls Being Over 90% Net Long Is Dangerous a For Crypto

Tony "The Bull" Severino

4 years ago

2 mins read

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The decentralized finance buzz has finally started to cool off, but dip buyers are already over 90% net long on DeFi futures on crypto exchange Binance.

This says the market is incredibly bullish on these assets, however, mob mentality often leads to irrational decisions based on emotions. It also could be extremely dangerous for the crypto market, which has been overly greedy for some time now.

DeFi Bulls Blinded By Green, Charge Forward Toward More Red

Check crypto Twitter or any cryptocurrency sub-Reddit, and there’s no avoiding talk of the current DeFi trend. Wealth is being generated overnight, and assets are rallying hundreds of a percent, one after another to no end.

One such asset even unseated Bitcoin as the most expensive crypto asset on a per-dollar basis. The success story is just one of many, however.

It has even promoted some crypto insiders to speculate on completely worthless assets, knowingly, to try and turn a profit. Some get burned in the process.

Only recently have any of these assets corrected by a meaningful amount, but much of that was prompted by a greater crypto market pullback led by Bitcoin and Ethereum.

But as these assets crashed, dip-buyers on Binance futures have amassed a substantial long position, outweighing shorts nine to one. With bulls over 90% net long on DeFi, a disaster could be looming.

How Being Overly Net Long Could Nuke Overzealos Crypto Dip Buyers

The cryptocurrency market Fear and Greed Index reaching extreme highs has the market revisiting discussion about contrarian trading. Top investors over centuries all advocated, as Buffett so eloquently put, being “fearful when others are greedy,” and vice versa.

Greed is blinding. When easy money is being made, there’s no time when investors are more exuberant and unaware of any reversal taking place.

At the peak of the crypto bubble, investors bought the dip, only to be crushed in losses. After the latest DeFi dip, could that be what’s next for crypto investors?

91% of traders net long on Binance futures is a sign that the market may be too bullish, and is presenting a more profitable contrarian trade for those who take the risk.

Trading itself is all about risk management, and risk to reward ratio. These crypto traders may learn the hard way that the risk is greater to the upside, and reward even more enticing on the other side of the trade.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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