|
An active day trader myself (sort of), I often think about common mistakes people make in trading. And it seems that I have traced back most if not all such mistakes to their root cause. In a nutshell, it all comes down to being unable to back out if something goes wrong. For example, you buy a few bitcoins at a December high and expect the price to continue rising, which is kind of obvious. Instead, the price starts crashing down and you find yourself in a situation that you didn't envisage or consider beforehand. So your best option would be to bring things back where they were as fast as possible even if it means some loss.
It is not so much about placing dumb stop-loss orders or other trading techniques aimed at minimizing losses as about your mental disposition or general attitude to immediately get out of what can be loosely called a decision limbo when you basically don't know what to do. In other words, search for the exit where the entrance is and do that fast.
|
|
|
|
Don't get me wrong, but I think that your view is way to focused on price and speculation and you should really focus on a fundamental view. If you consider bitcoin development potencial, and current adoption level, it's obvious that the price will rise if bitcoin succeeds in it's goals. It's "simple" mathematics and offer/demand principles. Bitcoin fundamentals alone, justify the investment, and if people invest the price will rise.
Of course that speculation will always come into play, and that is what makes the price crash and move forward in cycles. Some people just panic sell for no reason, others understand that's how the markets work, and sell to be able to buy at a lower price, thus maximizing their investment. There are of course those that don't want to risk trading, since it's hard, and still believe in the bitcoin fundamentals and consider it a good investment, so they will just hold.
The educated investors that also know how to trade don't really need crashes for the price to rise, but they do like them because they can use the dips to maximize their investment. The educated investors that don't like to trade, don't really care about the crashes and will just patiently hold their coins until they can use them. The other guys, those panic sellers and fomo buyers, are just here to feed the others until they educate themselves.
I don't get you wrong because I'm perfectly fine with your idea. It could be rephrased that we need real adoption if we want consistent growth. I completely agree with such view if that is your point. Here, in this thread, I'm trying to describe what happens in practice irrespective of our own ideas about how Bitcoin should develop. In other words, I focus on what we have, not on what we want or should have. In a sense, it is not like my idea how things should go on in general. And, yes, I agree that organic growth is better than speculative. |
|
|
|
This is just a thought that occurred to me while reading some posts around here, feel free to discuss it or even criticize it. So if we want Bitcoin to rise in the future, we need it to crash first and many wannabe traders to sell off their coins at a loss when the price is low. If people don't close their positions in panic now and just wait out bad times, they simply won't let prices grow later because they will get out whenever the price rises just enough for them. But if they fix their losses, they will no longer have bitcoins to record minor profits and thus drag the price down in the future. As a consequence, the price can surge higher without a lot of selling pressure at bigger figures when the hype and buying frenzy begins anew.
The bottom line is that it is kinda required for Bitcoin to crash occasionally for the prices to rise higher eventually.
Your statement didn't make any sense to me. Bitcoin's price depends on many factors and not just on what traders want to do. The situation in your statement represents a very small fraction of the entire bitcoin market. First of all, you need to understand that we don't have a regulator in bitcoin market who will step in when the bitcoin price is falling. So the entire bitcoin market reflects the raw emotion of the public. Definitely speculators playes a big in it, but that's not all. We have a lot of investors who still believes in bitcoin and don't sell off their holdings just because the price is low. Instead the lower price gives them an opportunity to score more bitcoins at a lower price and average out their buying price. We are too small to judge a reason for bitcoin's price decrease as it is based on many factors. Well, I'm not quite sure if I understand your point correctly but isn't the price of any traded asset defined by the balance of supply and demand? I like to think that it reflects what traders actually do and this is what "the raw emotion of the public" ultimately comes down to, that is either selling or buying a coin. Also, I don't fully understand how a regulator in the Bitcoin market or its lack relates to the point I'm trying to make here. Sorry if I wasn't very clear in my post and caused some confusion. I think theres a big difference between a crash and a correction. After a crash the coin is worthless and dont recover. Thats not what happend in the past weeks. We got a correction because bitcoin rised to fast too much. So the panic sellers just make it worse, but it wasnt a crash. Everybody whos in trading and stock markets knows that we need corrections. So we need corrections, yes, but we dont need those panic sellers!
I think it is a matter of convention mostly. Personally, what you refer to as crash, I'd rather call a failure or fiasco, the f-word. |
|
|
|
|
I'm not very familiar with LN intrinsics but I'm pretty sure that Bitcoin's legacy protocol and its blockchain are not very "friendly" towards LN. For example, we needed Segwit activation to make transition to LN more smooth. There might be a lot of other roadblocks to its most efficient implementation in Bitcoin. And if LN is actually the future of decentralized payments as many people claim here, why not build it from scratch in an entirely new, LN-friendly coin which would have that technology from its very inception, without compromises and trade-offs?
So does anyone know about any such effort?
|
|
|
|
Bitcoin Talk Name: Canis Majoris Bitcoin Talk Profile: https://bitcointalk.org/index.php?action=profile;u=1549664Rank: Member Post Count (including this post): 76+1 BTC Address: 3LMZuug1rioBRTAEWHJxWvcbYu8NfSPUcy ETH Address: 0xAa7e0572e3ca2F1A28a697552Cee70b7bE356702 Please check my application. Thank you. |
|
|
|
This is just a thought that occurred to me while reading some posts around here, feel free to discuss it or even criticize it. So if we want Bitcoin to rise in the future, we need it to crash first and many wannabe traders to sell off their coins at a loss when the price is low. If people don't close their positions in panic now and just wait out bad times, they simply won't let prices grow later because they will get out whenever the price rises just enough for them. But if they fix their losses, they will no longer have bitcoins to record minor profits and thus drag the price down in the future. As a consequence, the price can surge higher without a lot of selling pressure at bigger figures when the hype and buying frenzy begins anew.
The bottom line is that it is kinda required for Bitcoin to crash occasionally for the prices to rise higher eventually.
I think what you're trying to say is that crashes are needed to redistribute bitcoin to the strong hands from the weak hands. In order for the price to increase we will need people with a lower willingness to sell but that doesn't mean that we need a crash for such a thing to happen. I thought about that but if we proceed from the assumption that the weak hands are small fish mostly, the redistribution you mean will lead to even higher centralization of wealth in fewer hands. Big fish are unlikely to sell their bitcoins for a lower price, in the worst case they would write them off completely rather than record losses. Further, strong hands can allow the price to rise higher because they won't be quite content with tiny profits unlike weak hands ready to run. So strong hands are definitely better "equipped" for the price growth but without a major crash, there won't be wealth accumulation. I believe the most benefited by crashes in price are the big investors and not the little ones. The strong hands become stronger, the weak hands become weaker and in some cases, the weak hands lose all their coins... Surely some new enthusiasts benefit themselves from crashes too, as it's a good opportunity to buy cheap and hold, but for each $1 profit a new enthusiast/little fish makes, a whale is making $100 or even more...
Yep, crashes mostly affect those who can't afford to lose their money, and these are weak hands. But it is not just about strong hands becoming stronger at each turn of the wheel. The irony is that with each crash weak hands get removed and less stronger hands turn into new weak hands. And they will get slaughtered at the next dip. But since they are still stronger hands than those kicked out at the end of the previous pump and dump cycle, it will probably require stronger crashes too to get them thrown out of the market. And while crashes will likely lead to higher prices in the future, we should also expect deeper crashes along them as well. So you basically want people to sell at a loss and lose money, so that things could be better for you. I rather them sell at that little profit that you mentioned and then get out, and for the price to steadily rise.
This crypto world is like every man for themselves.
What I mean is that OP you're looking at it on how it will best benefit you, and in a way dismissing those who sell at a loss. They certainly do not want to sell at a loss. I fully understand what you both mean and I agree with your points wholeheartedly but we should keep in mind two things. First off, no one forces anyone to join this game, and second, this is a zero-sum game anyway where someone's profit is necessarily someone else's loss. So you are right, of course, every man is for themselves here. But you know the rules and if you don't accept them, you should stay away from the game. You have that choice. |
|
|
|
|
This is just a thought that occurred to me while reading some posts around here, feel free to discuss it or even criticize it. So if we want Bitcoin to rise in the future, we need it to crash first and many wannabe traders to sell off their coins at a loss when the price is low. If people don't close their positions in panic now and just wait out bad times, they simply won't let prices grow later because they will get out whenever the price rises just enough for them. But if they fix their losses, they will no longer have bitcoins to record minor profits and thus drag the price down in the future. As a consequence, the price can surge higher without a lot of selling pressure at bigger figures when the hype and buying frenzy begins anew.
The bottom line is that it is kinda required for Bitcoin to crash occasionally for the prices to rise higher eventually.
|
|
|
|
People checking mining profitability before a purchase is exactly how this correlation get established in practice. When they see that mining is profitable, they will buy mining equipment. But profitable is synonymous here with rising prices because the coins which miners receive simply start to cost more. So the higher the profitability the greater number of would-be miners are going to buy ASICs. But as you correctly pointed out yourself, more miners leads to higher difficulty. Thus the correlation between the price and mining difficulty is established.
That isnt anywhere near good enough to be called correlation because we dont know how many miners get shipped and there is a 2 month window before the machines arrive. Furthermore, there will be alottt more machines shipped when there are more manufacturers. Samsung may very well make a loss here but it isnt a big deal to them since they are huge. For example many new miners ordered units 1-2 months back when profits were farrr higher, around 5-8 times higher and now, when they get their machine, the proditability is a hell lot lower. Thus, there is no real correlation considering how huge the difference is.... A 2 month window explains why difficulty is lagging behind the price. Anyway, you can see on the chart below that difficulty has been following the price pretty close: Now that Bitcoin has gone down dramatically, we can see that difficulty still rises. This can be because miners are still adding mining rigs as there is definitely some lapse between buying a mining rig and actually receiving it, which you correctly pointed out. If the price doesn't rebound and flatlines from now on or even goes down further, we should see the mining difficulty go down too. If it continues to rise despite Bitcoin going down, then you would be right. So let's wait and see what happens in the next few months. The mining difficulty will not go down. Why would it go down? People will mine AS LONG AS they can make something out of it....even if it is 50 bucks a month? The only time it will go down is IF it becomes unprofitable to mine. But in that case, that would mean those with lower electeicity cost make like 50 bucks a month and those with higher electeicity cost switch it off. Both sides lose anyways. Miners can be mining for a loss for some time hoping that the price will rise in the future, especially if shutting down will cost them some bucks. But if the price markedly goes down as it has already done or even lower to $5,000 and below, mining will likely be no longer profitable for a lot of miners. They will start to leave, and that would mean decline in the hash rate because the rest can't arbitrarily increase their hashes. But if the hash rate goes down for a certain amount of time (about 2 weeks or so), the mining difficulty will get adjusted to match current hash rate. Therefore, if hash rate declines due to miners leaving, difficulty will necessarily go down too. Another question, though, is that they may have pretty high profit margins, so most of them can still remain profitable at present prices and no one is in fact going to shut down, thus the difficulty won't drop. As an aside, I'm not very familiar with Dash mining, but as far as I know it is a POS coin so we probably can't compare Dash mining with Bitcoin mining, at least not directly. Anyway, there can be a handful of factors affecting mining difficulty where price is just one of them, even though it is a decisive factor which should prevail over other factors in the long run. |
|
|
|
There`s no single manipulator,who is rich and powerfull enough to push the prices down.
There should be a group of big crypto whales and they sell together,forcing the price to go down.When the prices go down,all the small traders start to follow the trend,and eventually the market is manipulated.
Slow and steady decline means small panic.Fast and rapid price crash means big panic.Both scenarios can be created by manipulators.
What do you mean by "artificially bring the prices down to cause panic selling"?
I wouldn't call this decline slow, slow is over weeks but not like today and yesterday. If it wasn't a single manipulator or big whale cashing out, why are the prices going down in this manner? It looks like someone intentionally and deliberately keeps the rate constant to bring it to a point when people think it's over and freak out mindlessly selling their coins. That's what I mean by artificially bringing the prices down to instigate an avalanche-like panic selling. When the prices start crashing on their own. You think this decline started happening two days ago ? You need to take a look at the 1 day chart and start counting the candles from when it started showing red, may be you will understand that this started a long time ago. Just like the OP said, it is always a gradual process, they are whales, they know what they are doing, they come together and then play with emotions of traders to make a pretty good gain from it. Unfortunately, we have a lot of weak hands and traders in crypto, so that makes it even better for them. I'm the OP, lol. Truth be told, I've been following the price for pretty long. Should I say that I'm kinda day-trader? It was a gradual process which brought the prices down so much without even a chance of a slightest pullback. This was the most frightening thing in the whole business. Believe me I can tell the difference between someone steadily pressing prices down and organic decline or even organic crash, where you can catch pullbacks and reversals every now and then. It was like a smart trader slowly but surely closing a huge position. |
|
|
|
There are a few that I wish I could've merited, but these posts unfortunately will not be receiving merit from me at this point. My merit is running out, and so my criteria is becoming more stringent. Keep doing what you are doing and you will farm up that merit like no tomorrow; You are having conversations worth having, disagreeing in meaningful ways, plus you put thought and effort into each and every one of your posts. I have given each of these posts Merit, unfortunately I am getting a little bit low on merit and this is causing me to be a bit more conservative than I would like to be. You post very thought-provoking and interesting posts, very regularly. Your posts about whales, price manipulation, price correlation all of it is very interesting and I have "Watched" a bunch of your topic, because I hope to get involved in the conversation at one point or another. It is always stressful to read through dozens of posts, but I look forward to reading your posts in all honesty. Thanks a lot! Here's another interesting post and chart: https://bitcointalk.org/index.php?topic=2850347.msg29800445#msg29800445 |
|
|
|
People checking mining profitability before a purchase is exactly how this correlation get established in practice. When they see that mining is profitable, they will buy mining equipment. But profitable is synonymous here with rising prices because the coins which miners receive simply start to cost more. So the higher the profitability the greater number of would-be miners are going to buy ASICs. But as you correctly pointed out yourself, more miners leads to higher difficulty. Thus the correlation between the price and mining difficulty is established.
That isnt anywhere near good enough to be called correlation because we dont know how many miners get shipped and there is a 2 month window before the machines arrive. Furthermore, there will be alottt more machines shipped when there are more manufacturers. Samsung may very well make a loss here but it isnt a big deal to them since they are huge. For example many new miners ordered units 1-2 months back when profits were farrr higher, around 5-8 times higher and now, when they get their machine, the proditability is a hell lot lower. Thus, there is no real correlation considering how huge the difference is.... A 2 month window explains why difficulty is lagging behind the price. Anyway, you can see on the chart below that difficulty has been following the price pretty close:  Now that Bitcoin has gone down dramatically, we can see that difficulty still rises. This can be because miners are still adding mining rigs as there is definitely some lapse between buying a mining rig and actually receiving it, which you correctly pointed out. If the price doesn't rebound and flatlines from now on or even goes down further, we should see the mining difficulty go down too. If it continues to rise despite Bitcoin going down, then you would be right. So let's wait and see what happens in the next few months. |
|
|
|
Is it possible that the wallet is directly owned by bitterex?
In that case they would need the coins to pay the customers who request a withdrawal.
No, the wallet doesn't belong to Bittrex. You can search it at www.walletexplorer.com, and you will see that it is not linked to any service or exchange. So it is likely a "stand-alone" wallet which belongs to some really big whale. Now we should try to find out whose this wallet might be. Any ideas? Okay, I figured it out. That's a crazy amount of BTC. How did you come upon this address?
All big wallets are known. You just need to watch them closely. Probably because the withdrawal limits are higher compared to other U.S. based exchanges.
But no other exchange will follow Bittrex's example. It's only the 20th in volume and it's not even real dollars. If you want to crash then you'd have to head elsewhere. The guy is probably just cashing out using an exchange which he finds most reliable or where he is registered. |
|
|
|
I've been watching closely a Bitcoin wallet which has over 167,000 BTC in it. Here it is. A few days ago 7,000 bitcoins got sent to Bittrex ( 3000+ 4000), to this wallet. And soon thereafter we witnessed a massive price crash. Today another whopping amount of 5,000 BTC has been sent to the same exchange. Does it mean that we should again expect an imminent and massive market collapse in the next few days or even hours? |
|
|
|
This is quite interesting. I have been thinking about it. There is manipulation but how much isn't clear. I read whales put in orders to buy/sell then don't follow them through so that makes an impact. But if the price goes low will people rush to buy or wait till the price goes lower still. That's the question. I was myself thinking there will be a big crash later today or tonight and then it will be black Monday. Even if that doesn't happen I think a climb back will be very very slow. And no rocketing prices.
That's why it doesn't make sense to close your position at once. It would make sense sell slowly giving people time to rush to buy what they think low. You can even try to tempt them into a bull trap when they think the plunge is over. Then you start selling again. I don't think it is possible for a small group of individual to be able to manipulate a coin as big as bitcoin. This must be a huge group of influential and financially capable individuals. I am not fully aware of the whale stuff, can anyone enlighten me about this thing?
You would be surprised. Here's an example of someone who has over 167,000 BTC in his wallet sending thousands of bitcoins to Bittrex account some time ago: 3,000 and 4000 bitcoins sent 5 days ago (transaction 8d8bdbb42f6e40370e317587734c0aa7adfbf2a5fece88f8adaee3ed6659ad3d and transaction a6bd36443feca2554f59c5db0fc1a8e27a52540d0b2207a162a6c8883ce92991) 5,000 bitcoins sent today (transaction 6048aaab45e9e2e5c66b2b2cde78205cb81269eb00c4a996b61b424c87448c72) The Bitcoin address 1N52wHoVR79PMDishab2XmRHsbekCdGquK belongs to Bittrex. I can't even imagine what price would look like if all 167,000 bitcoins got dumped at once. |
|
|
|
If the price holds, I believe we may start going for an all time high in the next month again, this time, having shed all the previous idiots that are here to make some bucks but aren't here for the long term as they have no idea what they are buying.
There will be next idiots because without them the price wouldn't move up a dollar. So you should be kind of grateful to them because you sell to them when the price is high and buy from them when the price is low. But as recent developments have clearly shown, they are not the only players in the crypto playground, and it may take a little longer before we actually start going for a new all time high this or next month. |
|
|
|
|
It appears that whoever is bringing the price down definitely knows what he is doing. After the selling pressure got removed for some time, the price bounced back a little and more liquidity entered the market. And when people started to think it was over, the pressure resumed. And we are now almost $2000 below where we were just two days ago. It was a classic though minor bull trap. Is there any better way to strip people off their money?
|
|
|
|
If a whale decides to close his position, he'd do it instantly and wouldn't sell off in increasing increments as to what we have witnessed here. Honestly I think that the recent huge crash is intentionally aligned with the bad news reported by media regarding South Korea and India's stance against cryptocurrencies. Or it could have been a correction for bitcoin to reach its supposed "true value" before the FOMO kicked in on the last weeks of November. There are endless possibilities; a correction from $15k++ is a must and we all know that it couldn't hold for too long considering how fast it came in there.
I'd be happy to hear the reasons why you think a whale would want to close his position instantly. If we are talking about a really big whale, then trying to close his position at once would just eat away all liquidity from the market. On the other hand, if he closes it slowly and gradually, he will be better off because traders won't be scared away by a sudden price crash. As I said in OP, many traders would start adding liquidity to the orderbooks, thinking of the price decline as a good buying opportunity. Also, if it had been because of some negative news hitting the wires as some suggested here, the price would have moved chaotically. But it was a steady and persistent decline, which clearly shows that it was a deliberate and likely concerted effort. |
|
|
|
Dude, there is NO CORRELATION between price and difficulty period lol. Price got pumped last year due to hype and good news from media. That seems to have died down for now.
If there is a correlation, dash price needs to be 2-3 times higher than it is now due to the difficulty's phenominal rise. Antminer D3 will then make some significant profit instead of wat it is doing now.
Sorry to say that but you might be wrong here because there is some correlation between price and difficulty. It may indeed take some time to get established and revealed, especially when there are huge price swings in the short term. Nevertheless, if the price goes up in the long term, new miners will join the club, and the rise in difficulty will definitely follow after some adjustment period until profitability sets at some typical value. On the other hand, when the price goes down, it becomes less profitable or just no longer profitable to mine for some or most miners, they fall off, and difficulty goes down too. Obviously, it is not as simple as it looks for there are a lot of factors at play here. Volatility is likely the most important one of them, which massively complicates the matter, but certainly not the only factor. Another likely factor is that miners may be mining at a loss for some time expecting the price to rise in the future. Dude, there is no correlation. Tbat is just u thinking someone is looking out for u lol. More miners = higher difficulty Price has nothing to do with difficulty Price may have nothing to do with difficulty but difficulty definitely has everything to do with price. When will there be more miners - when the price rises or when the price falls long-term? Rising prices will undoubtedly increase profitability of mining at the current difficulty simply because the same number of coins mined will cost more, but if profits increase in some field or activity, they will invariably attract a lot of new players. Therefore, the rise in Bitcoin prices will attract new miners and the rise in difficulty will follow as you say yourself. More miners means higher difficulty. Price is the cause and difficulty is the effect in this case but all causal relationships are necessarily statistically correlated, though the opposite is not always true, of course. It seems like you are looking at one side of the equation or in one direction only. Dude, u are dead wrong. There is no relationship besides people checking mining profitability before a purchase. That doesnt affect much and is made alot WORSE when there are more manufacturers. People checking mining profitability before a purchase is exactly how this correlation get established in practice. When they see that mining is profitable, they will buy mining equipment. But profitable is synonymous here with rising prices because the coins which miners receive simply start to cost more. So the higher the profitability the greater number of would-be miners are going to buy ASICs. But as you correctly pointed out yourself, more miners leads to higher difficulty. Thus the correlation between the price and mining difficulty is established. |
|
|
|
As Bonsaiv points out, this single-stroke, one fell move, would never have the intended effect, if in fact the manipulation were to happen that way. It might result in a momentary flash crash, but then prices would restabilise pretty quickly. Single entities have been discussed of course, with some compelling evidence, especially by this guy from Hackernoon: hackernoon.com/meet-spoofy-how-a-single-entity-dominates-the-price-of-bitcoin-39c711d28eb4 and his other articles.
Spoofy may not be real, but the narrative is interesting and not entirely unscientific (otherwise ignoring the choice of language). It wasn't not a single-stroke, one fell move. I watched the price go down for two days, and it didn't look like a flash crash by any means. This is the point which I want to emphasize once again. It looked like a deliberate attempt to move the prices down in a consistent and gradual, even frightening manner, allowing more traders to enter the Buy side of the orderbook and then relentlessly eating their orders. It was a very well thought-out scheme, not some frantic effort to close a position at any costs, which is what most flash crashes can be traced to. That's the main reason why I started this thread. Think about this though, these would-be manipulators would surely not want to kill their golden goose. Even if they brought the price down, it would only be for them to re-enter into long positions. Why make a few billion today when you could be making hundreds of millions for many tomorrows?
I see your point but you may miss a few other factors that may be in operation here. For example, it is sort of common knowledge that when Bitcoin price falls, most altcoins fall even harder, and harder may be a serious underestimation here. So what if would-be manipulators are really trying to move their financial capital from Bitcoin to some other coin like Ethereum or Litecoin? I think in this case they wouldn't care if Bitcoin dies in the process as long as the coin of their choice survives. Also, given the general negative attitude toward Bitcoin recently revealed by the powers that be, it may in fact be worth earning a few billions today because there might not tomorrow at all. What do you think? |
|
|
|
|
Show Posts
