We are in a bear market right now, and whilst there are early signs of an uptrend that will take us all to 40, 60, 100k (of course), we will likely see a few dumps before this happens. When we started with Cryptos, everything was so easy – money was lying literally on the street. You bought some coin or token you’d never heard of before, just held it, and one day, magically, its value has doubled, tripled, quadrupled, and we’ve all felt a bit like modern Warren Buffett. Yeah. Those have been the good times – and then the bears took over. Bitcoin goes down, dragging all the altcoins along with it. Too bad, we can’t profit from falling prices, right? But who said we can’t actually? There is BitMeX. (And with the opportunity comes also a very sad story; read on…)
Why Most Investors Lose Money During a Bear Market
This seems to be the time of Bitmex, the time of the impatient short-attention-span investors who have had enough of the bear markets and have lost their patience. Those guys that read 20 reviews before buying a battery charger but throw 20k into dodge because someone in a Facebook group has shilled it.
What we typically see is that people have all their funds locked into many different altcoins, all of which are losing value over time during this crash. This does not feel good; this is not what we wanted when we came to crypto – no good feelings of ever-rising accounts for us anymore. Difficult.
Out of such emotions, where one can’t keep up with a suffering portfolio or bear with the lack of action and thrill, we often do our worst mistakes. Bitmex saw a massive increase in new users over the last days, and we are pretty sure a massive amount of rekt accounts as well. Bitmex offers a dangerous leverage of factor 100, which can literally make you rich in seconds – and also burn all your money in the blink of an eye.
Let’s take an almost classic example of the average Bitmex user in this dark period of the bear market.
BitMex Options
Keep this word of warning in mind when you consider playing with 100x leverage. It is teasing, but it is no option. Let’s take a look at Bitmex.
If you register with Bitmex and deposit your Bitcoins (only available deposit method) you might be confused at first. Those of you who have always traded on Binance will find a different level of the trading interface. There will likely be new words for you, and you might feel insecure – please, before you ask the Reddit guys or in forums, take a few minutes to browse the Bitmex help database and read. You will get it; whether it’s a bull or bear market, it makes no difference. Take your time and read it slowly; all the answers you are searching for are right in front of you. There are thousands of tutorials online, yes, even those digest YouTube videos.
How To Short Cryptos with Bitmex?
Bitmex offers a few cryptos as futures: ADA (ADAXBT as ADAH18), Bitcoin Cash (BCHXBT as BCHH18), Ethereum Classic (ETCXBT as ETC7D), DASH (DASHXBT as DASH8), Ethereum (ETHXBT as ETHH18), Ripple (XRPXBT as H18), Monero (XMRXBT as XMRH18), Litecoin (LTCXBT as LTCH18), Stellar Lumens (XLMXBT as XLMH18) and ZCash (ZECXBT as ZECH18). And of course Bitcoin (XBTUSD).
Don’t get into hibernation mode because of the futures thing; as you can see, they are offering mostly H18 futures contracts, which you are trading (the only exception is ETC, with a Day 7 contract). These futures are the anticipated prices for a defined point in time (like 18 hours from the start) set by traders who hold those contracts. If you place an order with Bitmex, you don’t have to hold until the end of the contract; you can go short or long until your exact bear market target.
On Bitmex, you are trading altcoins against the almighty Bitcoin ($XBT), which makes it easier to short them. A general learning for altcoins in the last years was: Bitcoin up = Altcoins down; Bitcoin down = Altcoins down; Bitcoin sideways = Altcoins up. What did we see this year? We saw a dramatic fall in Bitcoin, and, with it, all altcoins saw a massive price decrease. However, most of the volume here goes to Bitcoin, so this is mostly where the dance is.
While we hold our altcoin purchases, there is no reason not to short altcoins or bitcoin on Bitmex. You can’t deposit your alts, so you can just keep holding them. You deposit your spare Bitcoins or Satoshis, and after 1 network confirmation, it becomes available in your account.
Bear Market Window
The integrated TradingView charts will show you the futures and the actual price against BTC. So let’s say we think BitcoinCash (BCHH18) will continue to fall. The left-side box on the Bitmex interface lets you place your order. We short 100 BCHH18 here, which means we get 0,6273 BTC deducted from our available funds for -100 BCH. Once the order is filled, we can set up a take-profit order at 0,100 bitcoin. If the price hits and the bear market order is filled, we shorted an altcoin and made a profit on it, like on any exchange where we would have bought BCH at 0,100 and sold it at 0,1135 (to put it into a vice versa exchange perspective).
Same goes for Bitcoin, which we trade against the US dollar here. You think it will go up again from 8,200K USD; you set up a buy/long order at that price and an equal sell order with your target. Also, vice versa: BTC is soaring around 12k, and you think it will drop back to 9k; you simply short the amount you can afford to lose.
So far so good, but there is a dangerous topic on Bitmex, just as we speak of being able to afford something…
Buying and Selling with Leverage on Bitmex
The beauty of crypto is that it is usually (was?) volatile enough, so you can trade with nice profits without needing leverage. Most crypto traders are familiar with exchanges where they buy actual coins. This means if you purchase 1 ETH for 0.1 BTC, this is exactly the deal. You really get 1 ETH into your wallet for that 0.1 BTC; the deal is closed, and you can withdraw to any wallet.
Trading on Bitmex is a different concept you should know about before spending your satoshis there. You don’t buy any coins on Bitmex; you purchase contracts, hence the futures. Let’s say you think BTC will start a big upmove from 8,9k. You have 0.1 BTC in your account and use x10 leverage. This would enable you to purchase 10 times as many contracts, in this case, for 1 BTC. As long as it is rising, it is wonderful; you take part 10x from each satoshi increase, which means you can significantly increase your account’s value in no time. But of course, there is a catch… Bear Market or Bull Market makes no difference.
100x “No” to 100x
And the catch is that it works the same way in the other direction. If you sell the top of a big green candle, you can make extreme profits. But if your trade turns out bad, and the candle breaks out to another, even bigger bullish candle, you might get rek’t in no time.
If you went all in or did not isolate the trade, your complete account can go to zero in no time. OK, this is unlikely (read: unlikely, not impossible) with 10x leverage, but the loss would hurt. The most teasing thing for the most newbies might be the 100x leverage, which is nothing short of insane. If you have limited equity on Bitmex, one false move of BTC will burn your account.
Recall the sad story posted above and don’t be that guy. We recommend a maximum leverage of x3 if you are new to this. Only clever planned trades, never a trade in a rush, as you have to “exploit that drop” – these things go wrong most of the time. The more adrenaline kicks in, the more stupid moves are made.
Shut down that Trollbox
The trollbox by Bitmex is one of the most desperate ones I have ever seen. If you follow signals or don’t trust your own analysis, this trollbox is a 100% secure way to go crazy; be sure to book the rehab before you open it. What you will see is fighting kiddies who went either long or short and are trying to fight the opposite direction down. The saddest thing is those users that went all in with 100x leverage and try to convince other traders in the trollbox to take the same position with self-invented news, fake technical analysis, and what else. This reminds me of junkies that want to make you borrow them money for the next push. If you are not 100% confident with your position, do not open the trollbox – just skip it.
Can I kill my “bear market boredom” with Bitmex?
It is hard to hodl through this long period; it really is. To all of us. Our amygdala was used to being teased and pampered by crypto in a positive way, and now we get nothing but depressive hits. Yes, sure, it is normal that we are in search for the next 100x kick. Sweaty palms and $$ eyes. But use your brain; the best way will be to stay strong and hodl through the dry time. Chances are that many people will gamble their equity and flush it down the toilet. Crypto funds which could be the base of a bright financial future.
If you want to try out leveraged trading on Bitmex, one needs extensive TA or fundamentals knowledge (which BTC is known to give a flying f*ck about most often), you need much powder in your account to keep up with the leverage, and you need a game plan for each trade about when to get out – otherwise, you will get rek’t. So if you are in for the Bitmex-thrill, be prepared for a risky gamble – we wish you good luck and hope we will keep meeting in the crypto world tomorrow.
Let’s close this post by showing you the Telegram crypto signal providers here to help you with trading, strategy, and support.
