Bitcoin Forum

Or those guys who sell large amounts at once buy them all back at some point?

Is there anyway to detect this?

If they do buy them back than BTC is not decentralized at all IMO.
The fact that a few can control the market and manipulate the price
because they own large % of the total BTC, means it's centralized.

 

they can only buy back fully if they precipitate other sales from their dump (and the ensuing fear). You can assume that if there's more selling after a dump, if they don't know something the market doesn't (ie pending mtgox shutdown) , then there will be opportunity to buy back more coins for cheaper.

That has become less and less true as time went on in our history. Each dump will typically reduce centralization of coins since it is more unlikely that they buy back all their coins+ unless they buy into a precipitated fall (which still, they can't buy into it all at once because that would kind of defeat the strategy of pushing the price down to get cheaper coins) . This move requires impeccable timing and increasing amounts of capital as the wealth becomes less and less concentrated (which it has). As such, the crazy swings we had back in 2011-12 have become less and less frequent.

However, if anyone has a way to figure out if there's been a whale(s) slowly getting larger and larger.... that would be good to know.

Large dumps redistribute coins to a larger number of people. Which in turn makes Bitcoin more widely support and also more 'useful'. It's a good thing

I think you all noticed that Bitcoin volatility has a tendency to die, leaving a stable currency with enough liquidity on both sides of the book so Bitcoin is actually useful for payments - if left alone. Looks like someone doesn't agree with such a state of affairs and is willing to spend $100,000 for crossing the spread and taking $2M of liquidity. I would not be very surprised if we saw a sharp spike up back to 130. And another flash crash. Ad infinitum.

What's curious to me is without regulations, and as long as wales exist, this seems almost a certainty.  If wales cooperate...

Except when there are a couple people who have placed the majority of the bids. Then you end up with people who already have a bunch of bitcoins gathering more. If the large dump precipitates more selling, you could end up with less people holding more bitcoins each after the dump.

yeah, true. Good point.

You can counter this by making sure you always end up with more bitcoins during/after each dip. Don't sell but just buy more on each big sell off. You make take a small (or bigger) loss in total fiat value if you do this, but the bitcoins of weaker hands will move into yours and others who adopt a similar strategy of min-maxing their own bitcoin stack. :)

I think the idea is to dump, and buy back your coins when everyone is panic selling.

That may be the idea, but it doesn't work in reality.

Not really, the prices are up again, I think each dump allows those who wanted Bitcoins to go into the market to buy more.

Well, it allowed me along with everyone else as per supply demand curves to buy more if anything (in addition to the initial dumpers).

I propose a method of observing what happens after these large BTC dumps. Look at the total amount of BTC in addresses that have balances over 10K, 5K, and 1K. Over time, does the BTC tend to accumulate increase, implying that BTC is flowing up? Or is this total decreasing, thus implying that BTC is being more widely distributed?

I'm assuming that the BTC rich aren't distibuting their BTC in many sub-1K addresses. I wouldn't be surprised if someone isn't regularly running these types of analyses, in order to gauge the market.

Interesting indeed. I would thing that this whole thing stays within MtGox, but one never knows.