Reading charts question.

[Roflpain]

Hello,

I have a question about a chart.
I read a lot of artikels of big companies who buy millions of dollars of bitcoin. But when I see in the chart, the volumes are red? (see image link: https://ibb.co/gb8nHwk)

Can anyone explain this to me?

thx in advance! And merry Christmas! May your crypto's grow a lot asap :-)

[1715652670]

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[mk4]

When these companies buy bitcoin, they don’t do it on spot exchanges(e.g. Coinbase, Binance, Kraken, etc). They do it on Over The Counter(OTC) platforms. For the simple reason that buying huge amounts of bitcoin on spot exchanges would easily shoot up the price, ending up with them buying lower amounts of bitcoin units; and they obviously wouldn’t want that. They would want to get as much bitcoin as they can with their money so they buy them directly, as so they would only have indirect effect on bitcoin’s price.

[TryNinja]

Like it was already explained above, most institutions don't buy over the market. They do it through OTC (basically P2P between big players/exchanges).

You are looking at the wrong charts. Here is the BTC Outflow chart from Coinbase Pro:


https://twitter.com/ki_young_ju/status/1341687832725766145

Merry Christmas!

[NeuroticFish]

Also they usually announce their moves usually long after they actually happened and their orders were (indirectly, as mk4 said) spread over longer period of time at multiple exchanges. So you won't know what period of time to actually check.
 
And you should check the charts for exchanges with much bigger volumes than Bitbay. I suggest one of the Top 3 from here.

[Roflpain]

When these companies buy bitcoin, they don’t do it on spot exchanges(e.g. Coinbase, Binance, Kraken, etc). They do it on Over The Counter(OTC) platforms. For the simple reason that buying huge amounts of bitcoin on spot exchanges would easily shoot up the price, ending up with them buying lower amounts of bitcoin units; and they obviously wouldn’t want that. They would want to get as much bitcoin as they can with their money so they buy them directly, as so they would only have indirect effect on bitcoin’s price.

But after a while, the price would go up... ?

So the most news that comes out, of the companies that bought BTC, is probably news from begin december... the most companies bought begin december and then the price shot up 2 weaks ago... Is that correct thinking?

(I'm new to this and try to understand everything but it is hard but fun)

[Bitcoin_Arena]

The price sometimes reacts to news not because of the direct effect of those companies buying Bitcoin but sometimes just due to speculations and FOMO (fear of missing out) by some traders who also rush to buy Bitcoins having it in mind that the price is most likely to shot up.

Also, if the buyer just decided to place a bid (buy order)in the order book, there is no way you are going to see it get reflected in the trading volume. It's only when the buyer acts as a taker (just buys bitcoin directly at the market price or fills the asks/sell orders directly) will you be able to see a direct spike in trading volume and the price if the buy order is so huge.

[Beparanf]

When these companies buy bitcoin, they don’t do it on spot exchanges(e.g. Coinbase, Binance, Kraken, etc). They do it on Over The Counter(OTC) platforms. For the simple reason that buying huge amounts of bitcoin on spot exchanges would easily shoot up the price, ending up with them buying lower amounts of bitcoin units; and they obviously wouldn’t want that. They would want to get as much bitcoin as they can with their money so they buy them directly, as so they would only have indirect effect on bitcoin’s price.

But after a while, the price would go up... ?

So the most news that comes out, of the companies that bought BTC, is probably news from begin december... the most companies bought begin december and then the price shot up 2 weaks ago... Is that correct thinking?

(I'm new to this and try to understand everything but it is hard but fun)

It's up to the general crypto community if they will buy the news or not after they announced that they acquire BTC. There BTC holdings didn't affect the price, The news that they bought huge amount of BTC is the one who will boost the price. Its still a gamble for them if the price will pump after they bought that's why they are hyping the market.

To make it simple. There holdings is not part from exchange so definitely its not recorded on any graph since graph records is only based on exchange transaction. It will just give an effect once they sold there Bitcoin to an exchange.

[pixie85]

But after a while, the price would go up... ?

So the most news that comes out, of the companies that bought BTC, is probably news from begin december... the most companies bought begin december and then the price shot up 2 weaks ago... Is that correct thinking?

(I'm new to this and try to understand everything but it is hard but fun)

I don't know if you're aware of this thing as a beginner but red candles don't mean there's little buying going on. If there's 1 million USD in buys and 1 million and 10 dollars in sales in a given hour or a day depending on what you have your chart set to, the candle will be red. It won't matter that there's less than 0.1% difference in sales. The candle will be red anyway.

Also, every day coins are mined and put on the market and those new coins have to be bought for the market to stay green. So even if there's the same number of people selling as the number of people buying the price will be going down because new coins are tipping the scales.

Don't panic seeing some red candles. Bitcoin had 10% drops even in the biggest bull markets in its history.

[mk4]

But after a while, the price would go up... ?

So the most news that comes out, of the companies that bought BTC, is probably news from begin december... the most companies bought begin december and then the price shot up 2 weaks ago... Is that correct thinking?

(I'm new to this and try to understand everything but it is hard but fun)

Assuming that these companies hold their bought bitcoin for a long time, then yes. Them buying a huge number of bitcoin means that a huge amount of bitcoin is taken off the market.

I don't think 2 weeks is enough to feel their buying in my opinion. If something would affect the price in the short term, it would be the news of them buying, not the buying itself.

[pooya87]

But after a while, the price would go up... ?

So the most news that comes out, of the companies that bought BTC, is probably news from begin december... the most companies bought begin december and then the price shot up 2 weaks ago... Is that correct thinking?

(I'm new to this and try to understand everything but it is hard but fun)

Not exactly because the total amount of bitcoin bought by all these companies over the past month is not even 0.01% of the total volume that is being traded on exchanges in a week. So what they do is not going to exactly affect the market by any significant amount that could cause a significant rise.
The news itself could create a small hype but the rise coming from such hype is not big enough to cause this size of rise.

[OcTradism]

Not exactly because the total amount of bitcoin bought by all these companies over the past month is not even 0.01% of the total volume that is being traded on exchanges in a week. So what they do is not going to exactly affect the market by any significant amount that could cause a significant rise.
The news itself could create a small hype but the rise coming from such hype is not big enough to cause this size of rise.

The rise of bitcoin since the big test in March is organic and as long as it is organic, its rise is sustainable. I don't get how people look at the news and judge whales are holding or selling bitcoin. They can move their bitcoin in and out exchanges to create news.

Whales can move 1000 bitcoin but with $23,5 milions, they can buy more than 1000 bitcoin when price falls 5%. They will have 50 more bitcoin in their wallets.

Last 24 hours, 1,563,813 BTC were traded and I feel to surprising when people are mad with a transaction with few thousand of bitcoin.
https://coinmarketcap.com/currencies/bitcoin/

[hugeblack]

But after a while, the price would go up...?

One of the bad things is that big deals are not announced to avoid their effects on the price, and therefore when you read that companies buying large quantities, you are reading in the past that may have already affected the price.

Some things (especially news sites) try to find an explanation for the high price, even if that is not logical.

if a rich person buys 1000 Bitcoins and the price moves 10%, then they attribute the increase to that reason, which may be true, especially since that amount represents less than 1% of the capacity market.

Remember: the larger the market cap, the more liquidity will be required to move the price to 20% to 40%

[Jet Cash]

Don't forget that every purchase has a corresponding sale.

[OcTradism]

Remember: the larger the market cap, the more liquidity will be required to move the price to 20% to 40%

Exactly like this. It is the reason on market, altcoins can have crazy pumps in their young ages (early months) but when time goes on, the circulating supply will increase and marketcap rise too. To make the same pump, more capital is required. It is very clear to watch over the young and old altcoins. Old altcoins that have all time highs in 2018 are very difficult to be pumped again to the high prices.

They can be pumped with big % but it is very scarce pumps. Ethereum, for instance, will never be pumped 200% or 400% in 24 hours past many months and in the future.

[mk4]

Remember: the larger the market cap, the more liquidity will be required to move the price to 20% to 40%

And also, the higher the marketcap(especially when talking about hundred billions), the lower the room for growth is. This is why the people who think that XRP will reach upwards of $589 are so ignorant to the fact that XRP would be in the high trillions for it to reach those prices which is obviously very very unrealistic.

[pooya87]

Remember: the larger the market cap, the more liquidity will be required to move the price to 20% to 40%

And also, the higher the marketcap(especially when talking about hundred billions), the lower the room for growth is. This is why the people who think that XRP will reach upwards of $589 are so ignorant to the fact that XRP would be in the high trillions for it to reach those prices which is obviously very very unrealistic.

The main reason why shitcoins like XRP will never have any meaningful growth is that they are useless. The main purpose that these coins serve is to be pumped and dumped so they can only satisfy the short term profit mainly for the centralized authority that has full control over these centralized mutable altcoins.
This is also the main reason why they can't surpass a certain price level, you can't find enough people to participate in shitcoin pumps so they run out of steam.