Why we need price crashes and panic selloffs

[WickedPigeon]

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.

The classics never die.. they just find new markets.

From Jean-Paul Rodrigue (2017)
Bubbles can be very damaging, especially for those who arrived late with the hope of getting something for nothing. Even if they are inflationary events, the outcome of a bubble’s blow off is very deflationary as large quantities of capital vanish in the wave of bankruptcies and financial defaults they trigger. Historically, they tended to be far in-between, but the scale and amplitude of bubbles has accelerated; web/technology stocks (deflated in 2000), real estate (deflated in 2006), commodities (deflated in 2008) and crypto-currencies such as Bitcoin (deflated in 2018).

[Canis Majoris]

I'm more interested in the causes of these failures. When the stock market falls, there are reasons for this. It is possible to analyze this phenomenon and to make some predictions. But I can't see the reason for the bitcoin price drop. It bothers me. Of course I also do not like a long period of price decline, but this is not the most important for me.

There are a number of reasons of why the price went down, the most important for the recent decrease in price is that someone began to sell a huge amount of bitcoins this scared traders and investors and this made the demand to go lower and when you have a big supply and lower demand the price will go down, however bitcoin is also susceptible to things like FUD and political manipulation but still with each passing year the effect of those two things goes down.

yeah, but in fact that sell out started if February but media  pointed out for this only in March why?
I will agree that bitcoins is highly sensitive for all kind of FUD and news.. I'd say extremely sensitive..
and it is really not going to work for TA models)) cause according to TA is should rise to 15K, but instead it is going to 7k))

I tend to disagree that Bitcoin right now is extremely sensitive to FUD or just sensational news. It has become kind of invulnerable or even invincible to them. Let's remember the Chinese news that were shaking and quaking the markets through the entire 2017 year. At first they were making a difference and then this difference began to taper off until their impact came basically to nothing. But Bitcoin cannot be made invulnerable to large sell-offs because its price is still in the realm of economic laws like those of supply and demand.

[Samk]

CRASH AND MAJOR SALE OFF IS REQUIRED TO MAKE ANOTHER HIGH CONSOLIDATION AND FOR MORE INFLOW OF THE MONEY SO FUD IS CREATED AND ALLOW MORE TO COME IN.

[Kiweikoo]

panic selling is usually caused by an event that is not expected by the investor. it sparked investor fears and led to a massive sell-off, followed by frightened retailers and selling stocks that resulted in sharp drop prices accompanied by enormous volumes. market crashes are usually caused by panic selling action. I think this is the panic that makes the market stronger because of new opportunities after the panic has started to give special coins to wake up.

For me the panic selling is not a good thing because it has a lot of effects on the over all performance of the bitcoin, also the bitcoin is the decentralized currency so more people getting this panic, the worse it becomes but on the positive side, it has some better thing to offer because most of the new comers join the bitcoin whenever the market is down, so this positivity brings more investment to it to cover the loss.

[avp2306]

Actually we don't need that since small time people can't afford to see that since they may lose some huge value if the price go down severely and hence if it occur they don't have money to buy back.  That's why I really condone those rich people who spread fuds since they creating those bad words which can make people lose and get panic while them they earn with people's panic mindset.

[Canis Majoris]

For me those both situations only make market better for investors to just catch some coins at good prices for trade or just hodl next months.

True but also consider the fact that bitcoin is main source of money for buying an altcoin. If bitcoin price drops then the value of the altcoin drops too. Those who want to buy that altcoin need to be careful at what price they are buying otherwise they will not be able catch when they drop.

Perhaps, this mostly refers to little-known and unpopular altcoins at such exchanges as Yobit and their likes. Major altcoins like ETC, LTC, etc are all traded against fiat as well, and it actually remains to be seen where's more volume. Apart from that, the majority of people who trade these coins are well aware of their dollar price and their cross-rates.

[pixie85]

CRASH AND MAJOR SALE OFF IS REQUIRED TO MAKE ANOTHER HIGH CONSOLIDATION AND FOR MORE INFLOW OF THE MONEY SO FUD IS CREATED AND ALLOW MORE TO COME IN.

Don't write in all capital if you want to be read. It's much harder to read. Make it easy for us, not hard.
Crashes do make it easier to buy the coin, but they also discourage people who got scared and lost money. So out of the pool of people involved in crypto you're losing a group and gaining a new one. If there were no crashes new people would eventually come anyway and it would be a much healthier process.

[Canis Majoris]

Commodities are backed up by, well, commodities, currencies are supported by their governments, but the only support that crypto enjoys is faith in its future growth and expansion.

Governments dont support their currencies very well, most western governments are running a budget deficit and filling the void by printing more money.   So they are debasing the countrys exchangeable currency by gifting themselves new money.

I dont really call that support, its more like undermining and the value currency has comes from the people who trade, earn, produce and create value in society with the utility they provide via work, etc.

Why then cant those people be using crypto currency which is at least a known quantity with a clear equation behind its value.    There is no maximum to the amount of paper money produced, ask the people of Venezuela how this ends

Not that I disagree at large with your point, I just want to clarify that governments are not supporting their currencies directly as in setting some arbitrary exchange rates and then trying to keep them at any price. Rather, most sane and experienced governments are targeting price inflation rates because this is the real support that fiat money needs. On the other hand, for export-oriented countries it makes sense to keep exchange rates artificially low - as long as they manage to keep inflation bridled, of course.

[wireless1889]

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.

The rate is pretty much normal with its volatility on the line. Some factors in the market and the partnership with bitcoin affects the rate. This is normal though because I think this sets as an opportunity for new investors so that they can invest in a lower price since bitcoin doesn't really fall down into a very critical state which everyone just turn their backs on bitcoin or something.

[Dukjila]

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 do not agree, because after the collapse of Bitcoon, investors concern him with great apprehension, which is why the so-called "stability" (7K-9K) has now come.

[Tylev]

This will necessarily happen in the future. In general, people look only at their own profit and therefore bitcoin will first decently rise in its price, and since it will have a high cost, a significant part of the bitcoins will be nervous and constantly monitor news information and the bitcoin rate. If the bad news coincides with the decrease in the price of bitcoin in the event of its volatility, some of it will be regarded as a manifestation of negative information and will sell their bitcoins. This will lead to a further fall of bitcoin and then a real panic will begin. In a short time, bitcoin can almost completely depreciate. This can happen several times until bitcoin rises high enough.

[reda]

Nowadays most of the people panic for the bitcoin price down. So don't panic. it any time to up and down. So bitcoin price up and down it help to people invest in the bitcoin. if price will be down. This right time to buy and hold the long time. then wait for the price increase. Then sell it. Bitcoin is change the future life. So don't panic. check the price day by day. then get ideas and time to sell and buy the coin. Market place is help to gather more information of the all coin price list.

[Blue Bell]

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 do not agree, because after the collapse of Bitcoon, investors concern him with great apprehension, which is why the so-called "stability" (7K-9K) has now come.

It is just a dream for now bitcoin is not going to be stable in price ever, bitcoin will remain high and at the top forever as the most volatile currency, as price crash is the time when all people get opportunity to buy bitcoin and hold for long time, when more people sell at panic price automatically get down so they buy and hold for long time,. I am sure if price will keep on changing then within one year bitcoin will gain high value as an investment.

[kidamazo]

I would say also, the less competition we have here, the less guys are participating, the more profit we have, as a strong hands, so yeah, this cases is our highly important!

[mung_nasib]

But to make it happen quite difficult because each trader has a different attitude so that when bad news comes about bitcoin, the majority of traders immediately sell assets without thinking in the future and worsen the market situation.

[Roukawa]

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.

Constant peak is not good in economy that's why there is economic cycle. I treat bitcoin as our economy where we can stabilize the boom in a long run but we cannot prevent it to fall. If the price will always be on top, there are no more people that will try to invest in bitcoin. If that happens, the market becomes exhausted and turn it down again.
We cannot prevent the prices to dump because it depends upon how the people react in the market.

[trolltalk]

Many traders have different strategy and some are panic selling cause negative things comes in their mind first, we need panic sellers to decreased bitcoin price and buy, well this is the systematic rules to gain profit while others bankrupts in their investments there are few people that earned huge money.

[Harrisonimo]

The constant and regular buying and selling of bitcoin and other cryptucurrencies helps keep the market alive. We do have people who just want to sell off to have Fiat just for some emergency need; they don't care if the market is in dip or red. The panic sellers too sell off because of not  doing real research on the altoins they are holding

[sinta23]

But to make it happen quite difficult because each trader has a different attitude so that when bad news comes about bitcoin, the majority of traders immediately sell assets without thinking in the future and worsen the market situation.

indeed events like this often happen, because many who think that the price will not come back again or will not rise again, but this event sometimes come only briefly.

[iMark]

The constant and regular buying and selling of bitcoin and other cryptucurrencies helps keep the market alive. We do have people who just want to sell off to have Fiat just for some emergency need; they don't care if the market is in dip or red. The panic sellers too sell off because of not  doing real research on the altoins they are holding

Yeah you're right the price crashes may be necessary for the buying and selling to stay alive, imagine if the price keeps rising, maybe more people will sell than to buy, actually the falling price is a reasonable thing of a market, and it gives the other user a chance to buying bitcoins at a cheap price