Why dumps are important

[Clement Kaliyar]

I believe a periodic dump is good for both traders and users of any crypto be it bitcoin or any other coin.
It allows more people to get hold of coin which is not possible because of high rates.

Traders do thrive in these sort of situations and they really like to see huge movements so that they can make the best possible profit in these sort of market but the problem comes when you are small time trader and when you enter the coin at a wrong time and if the market is going down you will end up losing a lot of money in it unless you have the courage to hold for a longer time and most of them sell when they see the market going down,it is the same with stock as well as the digital market.

[deisik]

I believe a periodic dump is good for both traders and users of any crypto be it bitcoin or any other coin.
It allows more people to get hold of coin which is not possible because of high rates.

Traders do thrive in these sort of situations and they really like to see huge movements so that they can make the best possible profit in these sort of market but the problem comes when you are small time trader and when you enter the coin at a wrong time and if the market is going down you will end up losing a lot of money in it unless you have the courage to hold for a longer time and most of them sell when they see the market going down,it is the same with stock as well as the digital market

As the proverb goes, it's not all beer and skittles

It should be evident to anyone that there is no rose without a thorn, and as fast as the prices may climb they may crash even faster. But if things go massively awry, in the end you will lose only as much, i.e. as many dollars as you have put into Bitcoin. On the other hand, you don't necessarily need so much courage as to wait out the bad times. Small time traders should have courage to put stop losses here and there in the first place, and not be too greedy overall trying to squeeze tiny profits of smaller price movements. Though I don't really know whom exactly you refer to by these, i.e. day traders (as well as scalpers) or just wannabe traders

[Wowcoin]

The decrease of bitcoin is especially important for traders and investors . Due to the bitcoin dump more and more are investing because investors await that bitcoin become cheap rates for them to buy. That why fump of bitcoin are so important.

[deisik]

Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.
In other alt markets, lot of dumps are carried out by whales to depress the market and then pick up coins at a low rate. This is less likely to happen with bitcoins, though

That seems to be a misguided opinion

In fact, I'm rather inclined to think in the opposite direction. With most folks going to withhold their coins and given the limited supply of new coins, the Bitcoin market tends to be more prone to manipulation. In other words, there is not much growth in scale, and you seem to be confusing growth in prices with growth in "scale". I guess this is a mistake and your stance doesn't match well what happens in reality. In real life, higher prices at the basically the same amount of something traded (in this case, bitcoins) make markets thinner overall which facilitates manipulation, not prevents it (and this is irrespective of how many whales are there)

[Hazir]

I am not denying usefulness of a occasional dumps, they are like acting like a safety valve to overbought and bloated markets.
After dump the air is cleared and allows new blood to buy bitcoin - because entry point is much more acceptable.
But our final goal is to raise market cap of bitcoin to prevent price volatility and harsh pump&dump acts. We are not there yet.


 

[zedicus]

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

Indeed, since the price of bitcoin mainly depends on the traders itself. They are the reasons for the pump and dump of this coin. Although the news plays some role in its price ( good news means pump in price, and vice versa). I think it is minimal.

Now, because there are big traders who can manipulate its price (whether pump or dump it) and will make a chain reaction.

Usually they use this pump and dump strategy to generate a huge profit from buying and selling at a right time and by trolling newbie traders by means of panic selling and buying at the wrong time.

So, expect its price to reach $1300 again in the future or even surpass it.

[marketone]

Today trading market histories are completely based on dumps and pumps, the same rule applies to bitcoin also. When bitcoin is dumped, there are big chances that bitcoin will be distributed to many new users. In this way, the bitcoin market cap will increase and its credibility also increases and there are big chances when people are holding bitcoin the price bitcoin will surely increase.

[deisik]

I am not denying usefulness of a occasional dumps, they are like acting like a safety valve to overbought and bloated markets.
After dump the air is cleared and allows new blood to buy bitcoin - because entry point is much more acceptable.
But our final goal is to raise market cap of bitcoin to prevent price volatility and harsh pump&dump acts. We are not there yet

Rising market cap will in fact contribute to price volatility rather than prevent it

Since market cap just mechanically reflects the Bitcoin price (given that the supply of new coins is constant). I have been telling this literally for years already, and the current events (the price pumps and dumps as of recent) pretty well confirm the theory behind my claims. And it is not about the volatility increasing in absolute terms (as many may erroneously come to think), it is about rising volatility even in relative terms (i.e. when the price swings are termed in percentages to the value of price itself). In short, the price rise under fixed or diminishing supply of new coins inevitably causes so-called market thinning which is essentially synonymous with volatility

[taxmanmt5]

The decrease of bitcoin is especially important for traders and investors . Due to the bitcoin dump more and more are investing because investors await that bitcoin become cheap rates for them to buy. That why fump of bitcoin are so important.

Bitcoin dump and then pump are so very important for the traders as it keeps their interest intact and make it favorable for themselves by getting profits on buy low and sell high and repeating the cycle over and over again.

[CyberKuro]

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

The cycle always repeated as fluctuations give chance for new adopters and traders to purchase cheaper coins.
People attracted to bitcoin because the advantages offered and its price keep increasing over time, so we could get profits from bargain and hold it for long term investment. But, at least we know that the price will increase and set a new level of price right? And so far $1000 is the floor I guess.

[Amph]

it depends, what you said it's true, but if dump are casued by big whales that manipulate for the sole purpose to buy back more coins, it would reckt the possible distribution that you are talking about

and whales are greed they always buy more when they sell, no matter how many coins they started with, after all trading is about getting more not giving them to the other

[deisik]

it depends, what you said it's true, but if dump are casued by big whales that manipulate for the sole purpose to buy back more coins, it would reckt the possible distribution that you are talking about

and whales are greed they always buy more when they sell, no matter how many coins they started with, after all trading is about getting more not giving them to the other

I strongly advise you to read the whole thread

It is only one page and a few posts beyond that. The issues you raise in your post have already been addressed before somewhere in the first page. Since you obviously won't read (write before read approach) and you certainly won't alone, I shortly explain it again why your issues will remain mostly theoretical. First, whales won't be the only ones buying at lows and, second, not all people buying from them at highs will be selling to them at lows. In any case, if the price goes up over time, whales will be necessarily losing coins and accumulating fiat instead. For a more detailed explanation, read the friendly thread after all

[pinkflower]

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

Youre assuming that the top in the rich list of Bitcoin are offloading their coins. I think whats really happening is the super rich wallets in BTC are not moving their coins. So whats really happening is a thinner and wider distribution of the few coins in circulation, remember BTC is divisible up to 8 decimal places. It might like the real world where the top 1% controls most of the wealth.

[stevano]

is very important because it makes a bitcoin ownership circulation, which ultimately makes bitcoin ownership of equity, I think this is a positive thing and reasonable in the world cryuptocurrency

[deisik]

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

Youre assuming that the top in the rich list of Bitcoin are offloading their coins. I think whats really happening is the super rich wallets in BTC are not moving their coins. So whats really happening is a thinner and wider distribution of the few coins in circulation, remember BTC is divisible up to 8 decimal places. It might like the real world where the top 1% controls most of the wealth

That might well be the case

But if this is the case, that means that those Bitcoin holders which previously didn't cut it as whales (i.e. they couldn't move price much with their stashes before) now have become ones. What it basically comes down to is the capability of these new whales to affect prices, i.e. folks can move price with less coins (that's why they can be considered as new whales in the first place). If so, the current price crash is no more than a spike in volatility since market thinning should necessarily work in both directions. In other words, it can be moved up just as easily as it can be moved down. So we should just wait and see how the price would behave in the coming days

[PokerFace3]

Dumps happen for some reason and those reason are the points where bitcoins can improve .. sort of like we learn from our mistakes. We see a dump happening because a big investor or a group of investor dumps his coins and gets the market low, now that good happen with that is more people catch those headlines and hence get into bitcoins, certainly helping the community grow and so the price of bitcoins, in long term though.

[pitham1]

Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.
In other alt markets, lot of dumps are carried out by whales to depress the market and then pick up coins at a low rate. This is less likely to happen with bitcoins, though

That seems to be a misguided opinion

In fact, I'm rather inclined to think in the opposite direction. With most folks going to withhold their coins and given the limited supply of new coins, the Bitcoin market tends to be more prone to manipulation. In other words, there is not much growth in scale, and you seem to be confusing growth in prices with growth in "scale". I guess this is a mistake and your stance doesn't match well what happens in reality. In real life, higher prices at the basically the same amount of something traded (in this case, bitcoins) make markets thinner overall which facilitates manipulation, not prevents it (and this is irrespective of how many whales are there)

How easy it is to manipulate prices depends on 2 things - the depth of the market and the price. Compared to altcoins, both of these are high for Bitcoin. You just have to look at the daily volumes traded to see if it is difficult or easy for a whale to move the market.

[carriebee]

As far as I know, dumps are also important in trading in the market. These happen when there are groups or a person dumps his coin, or rather happen when there are panic selling place in. And, some are grab this opportunity to buy a coin which is low price so they can sold at a high price to earn profit.

[xIIImaL]

Dumps happen for some reason and those reason are the points where bitcoins can improve .. sort of like we learn from our mistakes. We see a dump happening because a big investor or a group of investor dumps his coins and gets the market low, now that good happen with that is more people catch those headlines and hence get into bitcoins, certainly helping the community grow and so the price of bitcoins, in long term though.

dump is been find due to demand and supply has been reduced. We know the price is volatile always in bitcoin. You can utilize the dump and you can some bitcoin and hold it for future purposes. Impacts are for traders involves with big trade volumes.

[deisik]

Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.
In other alt markets, lot of dumps are carried out by whales to depress the market and then pick up coins at a low rate. This is less likely to happen with bitcoins, though

That seems to be a misguided opinion

In fact, I'm rather inclined to think in the opposite direction. With most folks going to withhold their coins and given the limited supply of new coins, the Bitcoin market tends to be more prone to manipulation. In other words, there is not much growth in scale, and you seem to be confusing growth in prices with growth in "scale". I guess this is a mistake and your stance doesn't match well what happens in reality. In real life, higher prices at the basically the same amount of something traded (in this case, bitcoins) make markets thinner overall which facilitates manipulation, not prevents it (and this is irrespective of how many whales are there)

How easy it is to manipulate prices depends on 2 things - the depth of the market and the price. Compared to altcoins, both of these are high for Bitcoin. You just have to look at the daily volumes traded to see if it is difficult or easy for a whale to move the market.

It is not a question of kind

It is a question of degree (I hope I won't have to explain the difference). Bitcoin markets have been manipulated in the past. If you disagree with that, then there is nothing to talk about. If you agree, then with higher prices, markets are set to become less deep (i.e. thinner). This is a logical necessity if you please, given that the supply of coins is constant. Since the supply is constant (or can be considered as constant), you would necessarily arrive at a conclusion that higher prices mean thinner markets because at higher prices there will be less demand (all other things being obviously equal). But that pretty much means that markets would be more easily manipulated since less coins are needed to move the price in either direction