Why dumps are important

[deisik]

Since it was your point, not mine, after all. It was your assumption that dumps might happen due to many new folks becoming new whales because of the prices skyrocketing. I agree with such a possibility (since this is what I'm essentially saying myself, i.e. that higher prices contribute to even higher volatility) but as I suspect, the burden of proof is still lying on you. And after you provide evidence for that assumption, we can discuss this issue further (if you feel inclined to, of course)

I dont think I said this and if I said something you might have misunderstood me or maybe you may even have made a mistake in thinking that was me. But please quote the post you are talking about then we can discuss it more. There must be a little misunderstanding. Its hard when youre not talking to someone face to face

I thought it was your post after all:

If that happens more then maybe BTC could be considered making and supporting an unhealthy market? If there are more and more whales born in the system that could move the price up and down, the more people should avoid this type of market

I guess this is what you said exactly ("more and more whales born in the system"). Again, I don't deny that it might be the case since, in fact, this is what I think myself. More specifically, that with the price surging the market is necessarily thinning and thus folks with the same amount of coins can move the price stronger, or (which is the same) the less amount of coins is needed to move the price by the same value. But my agreement with this point of view doesn't magically make me obliged to prove it. As I said, the burden of proof is still on you, i.e. if there are really more whales born in the system or not, since it was your assumption in the first place, not mine

But if it was not you posting from your account but someone else, then I feel sorry

Its a misunderstanding. I read that you said more whales are born as they are destroyed. I quoted your post and followed it up with a question and asking for proof or an explanation why you think so

I think I explained it pretty well

If you didn't quite understand it, here's another explanation. Volatility by definition means that the price moves in both directions. If the price does move in only one direction (for example, rising without rest), such price change can hardly be considered as volatility. Volatility is like a coin, it always has two sides and I have yet to see a genuine Möbius coin (and I obviously don't mean a shit coin which has taken this name). Given that, we necessarily should conclude that if the price rise gives birth to new whales, then the price decline should destroy them (conceptually)

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[alphablitzer]

You can never control what the people will do when the price is like that now. Right now, the price is stabilizing around $900-$1200, probably around that range. You can see that when the time that it reached the all time high, it lowered down in price again because of the dumps. Since the range is like that, it became the standard price of bitcoin and probably go up again because people would start to hold it hoping to sell in a higher price $1200+. That's why I think dumps are a great thing.

[LoyceV]

In the case of the lack of major news (either positive or negative), the price is pretty stable right now.

I think we have a different definition of "stable". Not many stocks go up and down as much as Bitcoin. The same for currencies.

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.

I have a different theory: pump & dump is used to manipulate the market. The ones doing it are referred to as "whales". From my experience, they use a pump to increase the value of their Bitcoins, while inreasing demand. When the order book is filled with enough people willing to pay a high enough price, they dump their coins.
When panic sells start, they buy back their coins. In the end, the whale holds more dollars and more Bitcoins.
That's also why the term "weak hands" is used for people who panic sell once the price goes down.

But this theory is still not without its weak points

For example, while it is certainly true (well, at least, I think so) that unexpected, out of the blue dumps are caused by cryptowhales liquidating their stashes, but what about pumps? It could be said that pumps are in fact offsetting the leveling out effect of dumps. And while dumps contribute to more even wealth distribution, pumps certainly work in the opposite direction, i.e. contribute to wealth centralization (accumulation) in fewer hands.

It's nice to notice Bitcoin's price usually goes up slowly, and drops quickly. Also, drops go in stages: while dropping it usually goes up a bit again, only to drop more. I think this is meant to increase the price again before the whale sells more coins.
Looking at price graphs, I feel like Bitcoin "wants" to go up in price, but it's being held back by dumps.

In stock trading, "the common man" like you and me on average buy and sell at the wrong moments compared to the professional traders.
While pump & dump strategies are illegal on the stock market, Bitcoin is unregulated, which makes is a perfect playground for whales.

There is a thread that analizes MtGox-data, but unfortunately I can't find it back. It showed the large majority of users owns only a very small amount of Bitcoins, while only a few people own a lot. Basically, that's the same as the real world: the top 1% owns more than the bottom 50%. I doubt that's going to change any time soon in Bitcoin.

Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.

I don't think so: some actors still own more Bitcoin than exchanges trade per day. If they sell all, they influence the market.

[deisik]

In the case of the lack of major news (either positive or negative), the price is pretty stable right now.

I think we have a different definition of "stable". Not many stocks go up and down as much as Bitcoin. The same for currencies

I guess you shouldn't take my words out of context, ferstein?

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

Further,

I have a different theory: pump & dump is used to manipulate the market. The ones doing it are referred to as "whales". From my experience, they use a pump to increase the value of their Bitcoins, while inreasing demand. When the order book is filled with enough people willing to pay a high enough price, they dump their coins.
When panic sells start, they buy back their coins. In the end, the whale holds more dollars and more Bitcoins.
That's also why the term "weak hands" is used for people who panic sell once the price goes down

It seems that you haven't read the whole thread (or even the first page of it) since I addressed that question right there, in the first page. Dumps are good specifically because they work against dumpsters themselves (or market manipulators). It is simply no longer profitable for them to dump their coins since today they won't be able to buy them back. These dudes are set to end up with less and less bitcoins after every pump and dump cycle. Two primary reasons are behind that. First, not all top buyers are going to sell their coins at lows (panic sell-offs today became very superficial) and, second, dumpsters won't be the only ones buying at lows

Plenty of ordinary folks are waiting nowadays for these sell-offs to buy at lows

[marcuslong]

In my own opinion dumps are important where to make an good profit when the altcoins are decreasing you need to buy once you already buy then wait for the price to be increase this is the main reason why the coins are being dumped and then pumped in the end.

[Erza]

You can never control what the people will do when the price is like that now. Right now, the price is stabilizing around $900-$1200, probably around that range. You can see that when the time that it reached the all time high, it lowered down in price again because of the dumps. Since the range is like that, it became the standard price of bitcoin and probably go up again because people would start to hold it hoping to sell in a higher price $1200+. That's why I think dumps are a great thing.

$900-$1200 is pretty high range and it will really nice to get profit if you trade on nice timing, more over if there is fluctuative situation in a some range of time. I am sure this will really easy to get more profit. In a mean time people will just hold on until they have enough bitcoin and enough profit that they want

But if there is no dump, I think we still can get profit but we will get it slowly not as fast as there is dump but we will keep on buying on higher price as always

[stadus]

You can never control what the people will do when the price is like that now. Right now, the price is stabilizing around $900-$1200, probably around that range. You can see that when the time that it reached the all time high, it lowered down in price again because of the dumps. Since the range is like that, it became the standard price of bitcoin and probably go up again because people would start to hold it hoping to sell in a higher price $1200+. That's why I think dumps are a great thing.

$900-$1200 is pretty high range and it will really nice to get profit if you trade on nice timing, more over if there is fluctuative situation in a some range of time. I am sure this will really easy to get more profit. In a mean time people will just hold on until they have enough bitcoin and enough profit that they want

But if there is no dump, I think we still can get profit but we will get it slowly not as fast as there is dump but we will keep on buying on higher price as always

Dump are good so we really know how long can we trust bitcoin, some are selling and that's okay because it will not be wasted as smart people will buy that. The pump and dump is a normal gambler for big investors and since they are in control what we can do now is just play with them.
We must know what's inside their mind so we will be able to make a right decision on the timing of selling and buying.

[Labumi]

You can never control what the people will do when the price is like that now. Right now, the price is stabilizing around $900-$1200, probably around that range. You can see that when the time that it reached the all time high, it lowered down in price again because of the dumps. Since the range is like that, it became the standard price of bitcoin and probably go up again because people would start to hold it hoping to sell in a higher price $1200+. That's why I think dumps are a great thing.

Exactly once, someone who understands the language of trading will definitely know about the price of bitcoin. Dump and pump is the way that most widely performed by most of the people doing the trading, for the way they are using much more profit. Because the dump and pump give effect which is quite effective and quite a good thing to do. But just the same, to be able to get a good profit. We have to be clever in analyzing the market, otherwise it will all end in loss
 

[pinkflower]

Since it was your point, not mine, after all. It was your assumption that dumps might happen due to many new folks becoming new whales because of the prices skyrocketing. I agree with such a possibility (since this is what I'm essentially saying myself, i.e. that higher prices contribute to even higher volatility) but as I suspect, the burden of proof is still lying on you. And after you provide evidence for that assumption, we can discuss this issue further (if you feel inclined to, of course)

I dont think I said this and if I said something you might have misunderstood me or maybe you may even have made a mistake in thinking that was me. But please quote the post you are talking about then we can discuss it more. There must be a little misunderstanding. Its hard when youre not talking to someone face to face

I thought it was your post after all:

If that happens more then maybe BTC could be considered making and supporting an unhealthy market? If there are more and more whales born in the system that could move the price up and down, the more people should avoid this type of market

I guess this is what you said exactly ("more and more whales born in the system"). Again, I don't deny that it might be the case since, in fact, this is what I think myself. More specifically, that with the price surging the market is necessarily thinning and thus folks with the same amount of coins can move the price stronger, or (which is the same) the less amount of coins is needed to move the price by the same value. But my agreement with this point of view doesn't magically make me obliged to prove it. As I said, the burden of proof is still on you, i.e. if there are really more whales born in the system or not, since it was your assumption in the first place, not mine

But if it was not you posting from your account but someone else, then I feel sorry

Its a misunderstanding. I read that you said more whales are born as they are destroyed. I quoted your post and followed it up with a question and asking for proof or an explanation why you think so

I think I explained it pretty well

If you didn't quite understand it, here's another explanation. Volatility by definition means that the price moves in both directions. If the price does move in only one direction (for example, rising without rest), such price change can hardly be considered as volatility. Volatility is like a coin, it always has two sides and I have yet to see a genuine Möbius coin (and I obviously don't mean a shit coin which has taken this name). Given that, we necessarily should conclude that if the price rise gives birth to new whales, then the price decline should destroy them (conceptually)

I think I get it now. When you mean whales, do you mean whales in fiat value and not whales in the amount of BTC they have? If thats what you meant then I agree with what you said and theres no more explanations needed. I thought you meant more whales with the amount of BTC they are holding in their wallets.

That would also mean that if there will be more whales, then would therefore mean the present whales will become mega whales.

[deisik]

I think I explained it pretty well

If you didn't quite understand it, here's another explanation. Volatility by definition means that the price moves in both directions. If the price does move in only one direction (for example, rising without rest), such price change can hardly be considered as volatility. Volatility is like a coin, it always has two sides and I have yet to see a genuine Möbius coin (and I obviously don't mean a shit coin which has taken this name). Given that, we necessarily should conclude that if the price rise gives birth to new whales, then the price decline should destroy them (conceptually)

I think I get it now. When you mean whales, do you mean whales in fiat value and not whales in the amount of BTC they have? If thats what you meant then I agree with what you said and theres no more explanations needed. I thought you meant more whales with the amount of BTC they are holding in their wallets.

That would also mean that if there will be more whales, then would therefore mean the present whales will become mega whales

Something to that tune

Though I didn't mean whales as measured in terms of either fiat or bitcoin. By whales I mean the traders or Bitcoin holders who can significantly affect the Bitcoin price. If Bitcoin price rises the fiat equivalent of the stashes held by them obviously rises too but it is ultimately inconsequential since even if the fiat assessment of their funds remains constant that doesn't in the least mean that their influence should necessarily remain the same. For example, there may be just less demand and supply with the price staying essentially the same (i.e. the fiat value of these traders' funds doesn't change either) but their influence will nevertheless increase (and vice versa)

[pinkflower]

Thats a very interesting theory I will look more into it. That could prove useful in knowing what the current climate of the market will be especially these days of uncertainty.

[ananas99]

Thats a very interesting theory I will look more into it. That could prove useful in knowing what the current climate of the market is especially these days of uncertainty.

Do you think that the situation may change for the better or become more stable and understandable? I do not think so. Look at what is happening in the financial market and how the world economy is. People are almost driven into slavery to financial structures and this is done with their citizens, their own government. So I do not believe in the best circumstances in the world.

[zikel]

Thats a very interesting theory I will look more into it. That could prove useful in knowing what the current climate of the market is especially these days of uncertainty.

Do you think that the situation may change for the better or become more stable and understandable? I do not think so. Look at what is happening in the financial market and how the world economy is. People are almost driven into slavery to financial structures and this is done with their citizens, their own government. So I do not believe in the best circumstances in the world.

I do not believe that either. All people now depend on the government and on the maternity currency. They are forced to pay big taxes and commissions. Crypto currency can change people's lives for the better. That's why it needs to be popularized

[bitbob82]

In my own opinion dumps are important where to make an good profit when the altcoins are decreasing you need to buy once you already buy then wait for the price to be increase this is the main reason why the coins are being dumped and then pumped in the end.

and specially for short period investors as hey can get good opportunities for making good amount of bitcoin fro trading if there is some fluctuation in the price of bitcoin .

[frowsiter]

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

After reading your post I've voted "Yes, they are". You have a good point, I have never thought about this issue that way. If you are right, and hopefully you are, the dumps work to the benefit of Bitcoin because it is dumped by a few and adopted by many.

Right now I can witness the confirmation of your theory on a Bitcoin exchanger I use: many people are buying BTC for the amounts from $10 to $30, and I'm pretty sure big part of them are buying their first Bitcoins now.

This will also help bitcoin ecosystem to get refreshed stone to time so that making it healthy. But not everybody dumps their large volumes making it unstable economy. If all the small coop comes together and decide to do a big dump then it can really help. Also they should do it in timely manner so that the bitcoin will keep raising when purchased by many of us.

[yrreg ger]

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

This theory is great, nice topic. Even we always want to pump the price of bitcoin it will fucos only in increasing of the save bitcoin. How about if they want to get a bitcoin so we need the low price to buy bitcoin to make a profit. Dump is a part of bitcoin market because of being not stable of the bitcoin price, this is the reason why bitcoin gives excitement to every one also in the investor.

Bitcoin market is a great idea, with the price, investor can use this as business. And because of this the demand and supply depends on our investor. So the dump and pump is based on investors who want to take a profit.

[danherbias07]

A good speculation.
I will agree with the independent users who sold there coins.
Looking at how large the price of bitcoin is they are the easy targets to make them sell their coins.
When you add up every person who did it. That can create a wave making bitcoin fall a little.
But still I see that there are people who are willing to risk and wait for another up.

[gabmen]

In my own opinion dumps are important where to make an good profit when the altcoins are decreasing you need to buy once you already buy then wait for the price to be increase this is the main reason why the coins are being dumped and then pumped in the end.

and specially for short period investors as hey can get good opportunities for making good amount of bitcoin fro trading if there is some fluctuation in the price of bitcoin .

yeah that's right. if they price continues to pump, there won't be any good time to replenish btcs since it would be too expensive and not worth it to buy anymore. better to just buy other altcoins and focus on trading with them instead while the price is consistently going up

[deisik]

In my own opinion dumps are important where to make an good profit when the altcoins are decreasing you need to buy once you already buy then wait for the price to be increase this is the main reason why the coins are being dumped and then pumped in the end.

and specially for short period investors as hey can get good opportunities for making good amount of bitcoin fro trading if there is some fluctuation in the price of bitcoin .

yeah that's right. if they price continues to pump, there won't be any good time to replenish btcs since it would be too expensive and not worth it to buy anymore. better to just buy other altcoins and focus on trading with them instead while the price is consistently going up

This doesn't work any more

Altcoins today are pumped along with Bitcoin like there's no tomorrow for any of them. Therefore, if you run out of bitcoins and Bitcoin continues to get pumped, you will still have to buy any other decent coin which would be rising too. So it is all six of one and half a dozen of the other. The market obviously wants you to buy shit coins, there is always free place for you to hold the shitbag. You are always welcome to the shit club!

[bouren]

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.

This point is something which made me think twice.
How can you say it is only via dumping that bitcoin will be spread to new people in smaller proportion and will make everyone price taker? It is already 8 years of bitcoin and I think there are barely (<1%) investors who have significant reserves of bitcoin.
Now suppose, price of bitcoin keeps roaring. New independent traders want to enter market to make profits with flow. They tried buying bitcoin at present price and raise demand. Demand increases, price increases. Dump philosophy hasn't come anywhere, we are already much equal.