On stagnating prices

[deisik]

There is an implicit assumption in the cryptocurrency trading circles that when people lose interest in a cryptocurrency, its price is bound to fall. And this assumption has solid grounds and is often proved correct. Wtf, it is proved true in almost all cases at nearly all times. But things turn out to be different with Bitcoin these days and in this topic you will find an answer why exactly

You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders

Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)

And the end result is stagnating prices, which is what we mostly see these days

[clrpod]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while.

[omonuyak]

There is an implicit assumption in the cryptocurrency trading circles that when people lose interest in a cryptocurrency, its price is bound to fall. And this assumption has solid grounds and is often proved correct. Wtf, it is proved true in almost all cases at nearly all times. But things turn out to be different with Bitcoin these days and in this topic you will find an answer why exactly

You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders

Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)

And the end result is stagnating prices, which is what we mostly see these days

Bitcoin is really stagnant at this moment and it is not good for holders as most time is it is stagnated for long like this the price do fall.  Remember that the uncertainty is very high and I hope this time is going to be different. Many investors are waiting for a trigger point in other to be able to make an informed investments decision.

[deisik]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while

That doesn't explain why the price action is so restricted for so long

If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

[btc_angela]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while

.. snip ..

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

I 100% agree with you here. I must admit that I can't really see shorts at play and really affecting the price, but it seems pretty obvious at some point, specially when the price went on a boring and sideways pattern at $6K-$6.5K for months, and they're using bots for all we know to create a situation wherein they can really book profits in short amount of time.

[Pursuer]

it is not about "lack" of interest, nor is it about "losing" interest. it is mainly about "decreasing" interest which is best referred to as overly-excited people leaving the market. in 2017 when price was shooting up near the end of the year without any stop to be seen (talking about around $8k shooting to $20k period) the media was talking about bitcoin nonstop and there were a lot of big talks about it such as NASDAQ entering bitcoin and even opening up a bitcoin market! so obviously a lot of "overly excited" people entered and the bubble formed.

their exit caused the crash, but it didn't mean "interest" in bitcoin went away! in fact the real crash, shorts and all the rest came a couple of months after that exit and correction when price was being pushed down below $9k with lots of artificial sell pressure slyly dumping into orderbooks to break the strong buy supports every couple of months to push it lower another step.

the "stagnating" period in my opinion is the product of that manipulation and the fear that it causes. traders don't like a market which they can't predict so they make their exit and wait until things become more predictable and come back then. and until that time the volume shrinks and price stays the same.

[DeathAngel]

There’s nothing to worry about, the next halvening is around 18 months from now. The price will rise as we approach it & significantly some time after due to a reduced supply of bitcoin’s on the market.

[deisik]

it is not about "lack" of interest, nor is it about "losing" interest. it is mainly about "decreasing" interest which is best referred to as overly-excited people leaving the market. in 2017 when price was shooting up near the end of the year without any stop to be seen (talking about around $8k shooting to $20k period) the media was talking about bitcoin nonstop and there were a lot of big talks about it such as NASDAQ entering bitcoin and even opening up a bitcoin market! so obviously a lot of "overly excited" people entered and the bubble formed

To me, it is six of one and half a dozen of the other

If "decreasing" interest causes the price to fall 6 times, it pretty much cuts as interest lost. Or that it decreased 6 times if you please and now we have 1/6 of the former interest. Indeed, there is some interest left, as otherwise the prices would have crashed a lot lower. But that doesn't mean that this interest won't decrease further with prices crashing lower. It's all a matter of naming conventions and mostly irrelevant to the point of this topic

the "stagnating" period in my opinion is the product of that manipulation and the fear that it causes. traders don't like a market which they can't predict so they make their exit and wait until things become more predictable and come back then. and until that time the volume shrinks and price stays the same

But that doesn't explain why prices are stagnating as in the circumstances you describe, the price should go lower. In other words, it is not possible for traders to exit and price to remain the same

[dodgrad]

I think the coins have already been shaken from wallets of weak hands. I also think that whales wallets will soon be full, or they are already full, so funds for price manipulation are over. The third and probably the most important thing is that investors have lost confidence in the cryptocurrency market due to large manipulations and are afraid of investing. Stabilization will last for as long as investors regain confidence in cryptocurrencies again.

[deisik]

I think the coins have already been shaken from wallets of weak hands. I also think that whales wallets will soon be full, or they are already full, so funds for price manipulation are over. The third and probably the most important thing is that investors have lost confidence in the cryptocurrency market due to large manipulations and are afraid of investing. Stabilization will last for as long as investors regain confidence in cryptocurrencies again.

You can always borrow more with the coins you already have using them as a collateral

That's likely the most important piece that many people who are trying to analyze the current market are missing, that you can sell Bitcoin with borrowed money as easily as you can buy it with your own dough. Without taking into account the possibility of shorting any analysis will be incomplete and misleading. Without shorts the price might not have been able to fall this low, but, on the other hand, shorts are also preventing the price from falling lower (however counterintuitive or paradoxical it may look or sound)

[thecodebear]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while

That doesn't explain why the price action is so restricted for so long

If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

No.
Look at the last bear market. This is playing out no different. Now if we enter 2020 and prices are still in this range then yeah that is different, but compared to the last crash and bottoming out phase in 2015 and 2015 we're only about 60% of the way through this one (if it were to last the same amount of time). Which means we are still fairly early in the bottoming out phase. If prices stay stagnant (by which you really just mean the price has bottoming out) until Summer or Fall that would be normal. Bitcoin market is operating as normal right now, nothing new about it.

[deisik]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while

That doesn't explain why the price action is so restricted for so long

If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

No.
Look at the last bear market. This is playing out no different. Now if we enter 2020 and prices are still in this range then yeah that is different, but compared to the last crash and bottoming out phase in 2015 and 2015 we're only about 60% of the way through this one (if it were to last the same amount of time). Which means we are still fairly early in the bottoming out phase. If prices stay stagnant (by which you really just mean the price has bottoming out) until Summer or Fall that would be normal. Bitcoin market is operating as normal right now, nothing new about it

Obviously, you don't see my point at all

Please read my post again about the price action in 2015 as I definitely remember how it felt back in the day. If we make adjustments for the price growth which happened since early 2015 (and that would give us a factor of 15, just in case), and apply that price action to today's prices, now we should be observing price swings in the range of 300-400 dollars every day, with every other week witnessing spikes exceeding 1k dollars. But what we actually see is nowhere near that. We are flatlining and you know what it means, i.e. nothing good

[dodgrad]

I think the coins have already been shaken from wallets of weak hands. I also think that whales wallets will soon be full, or they are already full, so funds for price manipulation are over. The third and probably the most important thing is that investors have lost confidence in the cryptocurrency market due to large manipulations and are afraid of investing. Stabilization will last for as long as investors regain confidence in cryptocurrencies again.

You can always borrow more with the coins you already have using them as a collateral

That's likely the most important piece that many people who are trying to analyze the current market are missing, that you can sell Bitcoin with borrowed money as easily as you can buy it with your own dough. Without taking into account the possibility of shorting any analysis will be incomplete and misleading. Without shorts the price might not have been able to fall this low, but, on the other hand, shorts are also preventing the price from falling lower (however counterintuitive or paradoxical it may look or sound)

We are writing here about price stabilization, not about further drops. The idea of ​​a loan with collateral of coins i own, would be good if my predictions about the period of stagnation were shorter than several months. I believe that we drift to a "no mans land" until whales return to the cryptocurrency market and it can last even to 2020.

[deisik]

I think the coins have already been shaken from wallets of weak hands. I also think that whales wallets will soon be full, or they are already full, so funds for price manipulation are over. The third and probably the most important thing is that investors have lost confidence in the cryptocurrency market due to large manipulations and are afraid of investing. Stabilization will last for as long as investors regain confidence in cryptocurrencies again.

You can always borrow more with the coins you already have using them as a collateral

That's likely the most important piece that many people who are trying to analyze the current market are missing, that you can sell Bitcoin with borrowed money as easily as you can buy it with your own dough. Without taking into account the possibility of shorting any analysis will be incomplete and misleading. Without shorts the price might not have been able to fall this low, but, on the other hand, shorts are also preventing the price from falling lower (however counterintuitive or paradoxical it may look or sound)

We are writing here about price stabilization, not about further drops. The idea of ​​a loan with collateral of coins i own, would be good if my predictions about the period of stagnation were shorter than several months. I believe that we drift to a "no mans land" until whales return to the cryptocurrency market and it can last even to 2020.

I'm writing about stagnating prices specifically

If you didn't notice, and as far as I'm concerned, this is not the same as real price stabilization, though these two phenomena may look very much alike to an outside observer. And yes, stagnating prices don't bode well as most likely we are going to see lower lows in the coming days. Basically, that's the key difference between stabilizing prices (e.g. due to mainstream adoption) and stagnating prices (e.g. due to massive shorting)

Honestly, I don't quite understand what you mean by "the idea of ​​a loan with collateral of coins i own, would be good if my predictions about the period of stagnation were shorter than several months". People, me included, sell short today to buy back tomorrow (maybe, in a couple of weeks at most). So it is definitely not about you personally as there are different people which may have quite different timelines and ideas about future price

[HODL2090]

Bitcoin market is regularly littered with little spurts in the value which changes rapidly and sometimes the jumps or drops could be very significant.
On stagnating prices, volatility has been relatively reduced after the burst of the last bubble, early last year and while it has been reducing gradually, price spurts has not been very frequent.

[exstasie]

You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders

Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)

And the end result is stagnating prices, which is what we mostly see these days

That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic.

It's just a matter of market cycles. This is a heavily hype and speculation-based market, so the accumulation and distribution phases are quite pronounced. Nobody should be surprised at a multi-year bear market after the length and magnitude of the 2015-2017 bull market.

[deisik]

You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders

Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)

And the end result is stagnating prices, which is what we mostly see these days

That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic

Today it looks different

Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th). But that's not my major concern. If my theory is right and the current price levels are supported by shorts mostly, we may be in for a new crash like the one happened in November (after a new shorting cycle starts)

It's just a matter of market cycles. This is a heavily hype and speculation-based market, so the accumulation and distribution phases are quite pronounced. Nobody should be surprised at a multi-year bear market after the length and magnitude of the 2015-2017 bull market.

You should also count in the effect of the 2016 halving

[exstasie]

That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic

Today it looks different

Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th).

Obviously, no two charts will ever look exactly the same. These are just two different models for bear markets. 2014 was a constant slow bleed with occasional short squeezes and crashes. 2018 was was mostly bearish ranging with occasional short squeezes and crashes. The long term result is really quite the same though:

But that's not my major concern. If my theory is right and the current price levels are supported by shorts mostly, we may be in for a new crash like the one happened in November (after a new shorting cycle starts)

Yes, shorts are quite low right now, down to mid-November levels when the last crash began. It looks like the bounce from the low $3,000s may have just been a short squeeze. Bitfinex short levels in red:

[clrpod]

We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while

That doesn't explain why the price action is so restricted for so long

If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up

So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back

Why can it not? It's fact that price is a product of demand and supply. I think the big difference to 2015 is that the market is more established and well known now. Anyone who believes in btc has had the chance to be made aware of it and buy some, they've already invested and now don't have much more to invest. On the flip side, we've been bearish for a long time so anyone wanting to sell has had ample opportunity. The shear amount of dollar volume needed to move the price now compared to in 2015 explains why we don't see similar percentage swings.

[deisik]

That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic

Today it looks different

Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th).

Obviously, no two charts will ever look exactly the same. These are just two different models for bear markets. 2014 was a constant slow bleed with occasional short squeezes and crashes. 2018 was was mostly bearish ranging with occasional short squeezes and crashes. The long term result is really quite the same though

You don't follow me

You should look at a minute chart since last rally, i.e. since January 8th. It mostly looks like this now:



As you can see, there is a sudden burst of activity when someone buys or sells a bunch of bitcoins (in this case sells), and then there's a flatline with insignificant trading activity, i.e. no one is selling and no one is buying anything in relevant amounts. See no volume? I don't see either. That was not the case just a month ago

All in all, it means there is not much interest in Bitcoin now, and the price can be either locked within a short range or easily moved by a sufficient amount of shorts. But with shorts you can't rise, you can only fall further at the next shorting cycle which is to start when the majority of shorts get closed