So it's no secret that the market and bitcoin included have been crashing in the last couple weeks, hitting a low around 9k and then lingering around 10k and now looking to retest that bottom again. It seems like it's been bad news after bad news and then a lot of FUD around that. Here's what I don't get.
If we buy in to the logic that at these prices only the weak hands should sell out of fear, because the price is so low and a recovery is bound to come along, then surely there is only a finite number of these people that are willing to sell at such 'low' prices. You would assume that most people with a willingness to sell around 10k would have already done so, so why do we keep having more and more people selling and pushing the price down?
the truth is that although there are 16.8mill bitcoins.. hardly any are on exchanges
there have been times where it only takes less than $1k of a users money, to move the whole market cap by $168million
EG
if there was a orderline of 0.1btc and filing it changed the price from $10,060 to $10,070... thats a market cap change of $168m caused by buying 0.1btc($1k)
yep.. thats right.. i said it. bitcoin price/market cap is not true value
in short the bitcoin price or market value can be manipulated cheaply. this is not due to supply/demand. because the real supply demand is not found on exchanges. a large % of exchange trades are day traders, playing on speculation(gambling) not hoarders/sellers.
if there were 16mill coins on an exchange.. and they were forced to put their coins on the line at the lowest price they would be willing to sell for. you would see a far different resistance point(much higher) then these exchanges are 'playing' with
just look at most exchanges where the order lines are just mbtc/satoshi amounts .. not millions of bitcoin amount