Cryptocurrency market changed direction again with March’s Silvergate bankruptcy and hawkish Fed stance. Successful altcoin trader Andrew Kang shows that profits can be made even in this environment.
Altcoin market prepares for new year lows
Bitcoin and Ethereum are currently down over 10% on a weekly scale. Both of the biggest cryptocurrencies have been moving together since the beginning of the year and have rarely stepped out of each other’s shadows. About two weeks ago, investors were celebrating Bitcoin’s success to surpass $25,000 and Ethereum’s success to surpass $1.7k.
Now, the story is completely different. Due to the most recent crash, both cryptocurrencies are trading in the red around mid-January levels on Friday, March 10. At the time of writing, BTC is busy turning $20,000 and Ethereum $1,500 into support.
In the current market conditions, the profit rate of the investors has decreased significantly and the long positions are being ruthlessly defeated. However, some analysts manage to successfully capitalize on the downtrend by taking a position in the right direction.
Made $15 million profit from short transactions
Twitter analyst Andrew Kang (@Rewkang) was one of those traders. According to Nansen’s portfolio tracker, Andrew made a profit of “about $18.4 million” by opening “short leverage” on the top cryptocurrencies Bitcoin and Ethereum. Kang used the GMX and Kwenta platforms to execute the trades.
Andrew Kang has nearly $15 million in profit leverage shorting $BTC and $ETH on GMX and Kwentahttps://t.co/gCjkgce1Ec pic.twitter.com/dbt6LYy8sv
— Nansen Portfolio (@nansenportfolio) March 10, 2023
In its most basic essence, leverage allows traders to risk more than they invested to open a position. For example, 5x leverage increases purchasing power five times. However, it is important to remember that leverage is subject to high risk because it could lead to larger losses if the market moves in the opposite direction of the bet.
According to the details of the transaction, the trader has shorted over $5 million in BTC and ETH in the $23,000 and $1,600 regions respectively. While still open, BTC price is struggling to reclaim the $20,000 zone as support.
macro landscape
While traders like Kang have made profits using leverage, the majority of others seem to avoid such positions. As shown below, Bitcoin’s estimated leverage ratio currently remains stable, supporting that thesis. Perhaps as the directional trend becomes more tangible, the market may gradually see more traders step into this area.
As Kriptokoin.com, we have included the catalysts behind the sales that took place on March 10 in this article.
52460
