I've always struggled to understand how people make money on shorting a stock/coin. Would the whale make money because he's taken out a futures option and/or bet that the price would be say, $5800 on a certain date?
Does the price go down just because they dump a ton of supply on the market?
Has this whale now sold 2000BTC for really cheaply? Do they now have to buy it back at a higher price in order to try again?
Usually a big trader will enter the position, and then dump a bunch of coins on the market to get the momentum going in his desired direction.
Depends on how much margin they have: the bigger the margin, the bigger losses they can sustain before the exchange forces the position to close.
Thanks heaps for that!