On March 16, Andrew Kang, the giant whale of the derivatives protocol GMX platform and founder of Mechanism Capital, took action. Kang closed his long positions in the two largest cryptocurrencies and then opened a short position on them. Here are the details…
GMX whale opens positions for Bitcoin and Ethereum
cryptocoin.com As we reported, Andrew Kang, founder of Mechanism Capital and giant GMX whale (0xe8c19db00287e3536075114b2576c70773e039bd), closed his long positions in ETH and BTC today and immediately opened a short position of over $5.6 million. It is seen with the following data that the total value of the positions is over $5.6 million:
So why did Andrew Kang choose such a trading method? For this, first of all, it is necessary to deal with long (long) and short positions (short selling). Long and short positions show two potential directions of price needed to secure profits. Traders who open long positions wait for the price to rise from a certain point. According to some, opening a long position is equivalent to buying a cryptocurrency; Short selling is equivalent to selling cryptocurrency.
What does Kang open positions mean?
So, until recently, Kang was bullish with his long position in Bitcoin and Ethereum. On the other hand, short-selling traders hope that the price will drop from the entry point. So, with his latest move, Kang signaled that these two coins are on the decline. In a long position, the crypto trader has bought a cryptocurrency and expects to sell it when its price rises. Some traders thus tend to trade long term. Such traders are referred to as “bulls” in the market because they try to take advantage of emerging markets.
This is especially true for the cryptocurrency market, which often tends towards expansion. Looking at broad timeframes, it seems that BTC is forming highs. However, despite the gradual expansion of the crypto market, it makes major corrections after almost every rally. For this reason, there is also plenty of room for investors who are showing a downward trend, selling short, that is, opening a short position. Shorts are betting against the cryptocurrency and waiting for its price to drop.
The concept of long and short positions is universal and applies to all markets and assets. It can also be integrated with hybrid investment products such as derivatives, which are tradable instruments that track the price of an underlying asset. Thus, derivatives allow you to continue trading for a long time without actually owning a particular asset. For example, futures exchanges allow you to take advantage of Bitcoin price fluctuations without buying and selling the cryptocurrency. The famous GMX whale seems to have chosen such a path.
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