When the overhead supply is depleted, prices can move up on much less activity.
Why?
Because, if you remember how prices move, price does not need to trade at every price level. The pros have built up a position during the process of accumulation. They buy when the media coverage is terrible. They start buying from the masses when the masses panic and build a position during the testing process, just like a game of space invaders.
Simply put, they hold the inventory. So, if they don’t flood the order book with sell orders, it will take fewer buyers to move prices up.
This is when prices break out of a base. This is when the media and the public start getting involved.
This is when prices start to trend.
And this is what Gekko meant when he said, “Bulls make money, Pigs? They get slaughtered.”
Bulls make money by using their knowledge of human behaviour. They start buying and testing the market as the masses panic. Once their position is built and the overhead supply is removed, they stop driving prices lower at air pockets, and this is when prices start trending up.
And as prices move up, the pros who have been bullish when the masses have been bearish sell into the trend, and take profits.
How do the Pigs get slaughtered? The Pigs are the greedy and uninformed public. They generally only start buying when prices have already moved up (a lot), and they think it’s safe to enter the market because of the positive media coverage.
They buy what they think is an easy money “no-brainer.” It's not.
This process happens in stocks, forex, and bonds— any market with a reasonable amount of liquidity. And the best news of all is this process works in the cryptocurrency market too.
https://www.altcoinsidekick.com/blog/the-hidden-hand
