Something is seriously wrong with bitcoin markets. No liquidity? Should we sell?

[thecodebear]

OP, not sure why you think there is something wrong just because price went up a lot. It's Bitcoin. This is what it does.



If you're wondering if there will be a correction in the price after quickly gaining so much, the answer is yes, likely. But that's just normal price movements. There's nothing wrong with that market.


Whether you sell or not is up to you. Are you a short term trader? If so maybe it is a good time to sell and hopefully there will be a correction back to low-$50,000s where you can pick up more. I'd be pretty surprised if there isn't a correction in March, but nobody knows the future. If you're a long term holder, or even just looking to sell before the bull market ends, then this would be a terrible time to sell just before the bull market gets going, or just as its starting. We've got many months of bull market ahead, nobody in their right mind would sell long term bitcoin right now leading into the start of the bull run.


In terms of liquidity, the ETFs use the OTC market. Though with how much they are buying no doubt probably every day now OTC sellers are having to pick up bitcoin directly off exchanges to sell to the ETFs (or however the heck that all works haha). So yeah definitely bitcoin is being pulled off the exchange markets and going into the ETF holdings, which of course is part of what is causing the price to go up. There's nothing wrong with that. That's just how markets work. Without the ETFs there would already be lots of buy pressure at this point in the market cycle, now add in one or two billion dollars per week being scooped up by ETFs and that's causing a lot more of the supply to be bought up and so prices are going up. Again, that's how markets work. Nothing broken about it. More buyers equals higher price.


With the TradFi community piling into Bitcoin for the first time thanks to the ETFs, once the halving drops issuance down to 450 btc a day, and once the normal spot market buyers start FOMOing in (which I don't think has even started yet) there's going to be EXTREME supply shock. Like, after the halving when 450 fewer btc are being mined each day, and like a hundred 100,000 new people are signing up on crypto exchanges per day to get a piece of Bitcoin (as well as other cryptos), AND ETFs are buying up a few hundred million dollars per day, AND people aren't selling because they know prices are going to be much higher very soon. Yeah things are gonna get pretty crazy.

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[freedomgo]

Just continue hodling. There is nothing wrong with how bitcoin price performs in the market. The fact that we are seeing a rapid growth more than we can imagine is just normal for bitcoin. There’s nothing new to it as bitcoin price will consistently grow if there are no distractions on one side. However, we can’t keep the assurance that bitcoin price will never experience price correction later on. The fact that it undergo a rapid growth, surely a rapid price decline will happen later on. Patience and faith with our investment are the keys.

[MFahad]

I'm not complaining as I purchased 2 bitcoins in 2022 at 21K each, near the lows.

However, is something wrong with the bitcoin markets. I figured this would happen because those ETF's need to use exchanges to purchase coins and how is coinbase going to have the liquidity to deal with the current ETF demand.

What do you think, is there a liquidity crunch and it makes sense to sell now because sellers will come in soon to take advantage of these high prices? Or does it make sense to just hold at this point?

What do you think is the reason for the high price of Bitcoin? It's the supply and demand, so if there is a high demand and there is less supply or you can say liquidity, that makes the coins more valuable, so if you hold a couple of Bitcoins and there is low liquidity available while there is high demand, you can ask for a higher price for your coins and the buyers will have to pay you what you ask for if there are no other sellers for them to buy from.
Liquidity will never be a problem for Bitcoin, remember this. When there is less liquidity in a market or an exchange, sellers will start bringing in coins from other places to sell them there if they see a high demand which will make the price go higher eventually.

[Chibit01]

Well it is actually a question to ask your self also the answer can come from you also do you know why because when you bought that bitcoin in 2022 at the rate of $21k which we all know that bitcoin was at it downtrend then. But that's the business because nobody will like to buy up and sell down no it is just like buy store and sell businesses that exactly what it is...
 
If you potentially think that you are going to sell your investment I think is a choice you should make for your self because of regrets in the future bitcoin is fast rising and don't be surprised that it might hit $100k before the half of year so if you want to sell yours go ahead bitcoin is become the asset that the whole atmosphere want to buy and you are thinking of liquidity at this early stage of us to prosper with bitcoin...

I am not assuring you that bitcoin is going to liquidate or not but make a wisest choice for your self since you already have two bitcoin oh mehn you know what you are talking about already you are making a $80k profit from your both bitcoins that's actually amazing if you can keep more to gain more that your confidence not mine but if you feels like to sell it because you are afraid of liquidity that's also yours just be wise for your self >>>>>

[sgbett]

I'm not complaining as I purchased 2 bitcoins in 2022 at 21K each, near the lows.

However, is something wrong with the bitcoin markets. I figured this would happen because those ETF's need to use exchanges to purchase coins and how is coinbase going to have the liquidity to deal with the current ETF demand.

What do you think, is there a liquidity crunch and it makes sense to sell now because sellers will come in soon to take advantage of these high prices? Or does it make sense to just hold at this point?

If I was a trader I would look at things like this:

Actual: -$42k
Paper: +$84k
Cost Basis: $21k/BTC 
if BTC dies you are $42k down, if it goes to $1million. You still haven't taken profits but you have $1.96m on paper.

If you sell 1:

Actual: +$20k
Paper: +$42k
Cost basis: -$20k/BTC ie

if BTC dies you are $20k up, if it goes to $1million, you missed out on $979k. But you have already taken $20k and have £979k on paper



You have to bet to make money, but if you go broke you have no stake.

Not financial advice but reducing cost basis is one of my favourite risk mitigation strategies.

[Eternad]

However, is something wrong with the bitcoin markets. I figured this would happen because those ETF's need to use exchanges to purchase coins and how is coinbase going to have the liquidity to deal with the current ETF demand.

What do you think, is there a liquidity crunch and it makes sense to sell now because sellers will come in soon to take advantage of these high prices? Or does it make sense to just hold at this point?

OTC, they are purchasing huge chunk of Bitcoin over the counter either from exchange or the miner so that they purchased will not gonna cause a huge price impact in the market.

Besides the market is already continuously pumping hard with volume but not equal to the ETF volume. Probably some ETF provider is buying on exchange while some of them is on OTC. Although you point out a valid concern but I’m sure this sell pressure will absorb by those will want to enter late wants sell off begin.

[aylabadia05]

<snip>

Holding Bitcoin up to this point makes perfect sense bro. $60k and on its way to $69k. What percentage of profit has been obtained from the purchase price at that time.

If OP sells 2 bitcoins at $64k today and he places a buy order at $59k, then he will have 2,169 btc in his account. But this approach is not necessarily everyone's cup of tea, especially if they are comfortable with just holding. The main factor for success with this approach is their analysis and ability to understand the market.

Good calculation skills. 0.169 Bitcoin for me, then I can treat the people who live around my house to tea. I will invite all my neighbors to drink until their stomachs are bloated. Lol

Selling at $64k seemed to me the wrong decision because $69k was very close. If there is other income that can cover daily needs, maybe I will hold until Bitcoin breaks the price of $100k.
So later I can invite some neighbors for a holiday. Lol.

[Pedrination]

I refuse to sell due to the lack of liquidity. Why make it easier for Wall Street to snatch everyone's coins and undermine Bitcoin's usability for its loyal supporters? I propose we hold firm and refrain from selling our crypto. Moreover, I advocate for continued buying, sending a clear message to fund managers. Let's make it costly for them to acquire our coins, demanding over $100,000. Let's not sacrifice our future gains or provide sell liquidity that diminishes our coin's value. It's time to hold Wall Street accountable. Let them drive the price to over a million per coin if they want to incorporate our assets into their ETFs.

[hatshepsut93]

What do you think, is there a liquidity crunch and it makes sense to sell now because sellers will come in soon to take advantage of these high prices? Or does it make sense to just hold at this point?

You should only be concerned with such events if you are a day trader and try to profit of every movement. But if you bought in 2022 and still waiting, you're likely a long term investor so you should wait for a decent exit price. The bull market has only just begun, and there will be many corrections when other holders will be taking profits, but it's important to not panic thinking that that's the big crash and just wait. But also not get too greedy and missing on the bull market entirely. So it's best to sell in batches throughout the bull market and get some average price.

[sgbett]

I refuse to sell due to the lack of liquidity. Why make it easier for Wall Street to snatch everyone's coins and undermine Bitcoin's usability for its loyal supporters? I propose we hold firm and refrain from selling our crypto. Moreover, I advocate for continued buying, sending a clear message to fund managers. Let's make it costly for them to acquire our coins, demanding over $100,000. Let's not sacrifice our future gains or provide sell liquidity that diminishes our coin's value. It's time to hold Wall Street accountable. Let them drive the price to over a million per coin if they want to incorporate our assets into their ETFs.

Lack of liquidity!?

You can buy/sell BTC *everywhere*

[teamsherry]

That should be good news to you, if centralized exchanges are lacking bitcoin to sell then it means the demand of bitcoin is on the rise and scarcity would only increase the price of bitcoin for us, what you should be doing is holding and be less bothered about selling, cause right now if you sell so many person's are more than available to buy back from you and when the price scyrockets you would so regret it.

Liquidity can't actually affect bitcoin at this point that it is quite high on demand, it only a sign that you should hold your bitcoin even more.

[Renampun]

Just continue hodling. There is nothing wrong with how bitcoin price performs in the market. The fact that we are seeing a rapid growth more than we can imagine is just normal for bitcoin. There’s nothing new to it as bitcoin price will consistently grow if there are no distractions on one side.

from year to year the price of bitcoin continues to grow significantly, this shows that adoption of bitcoin is slowly growing, before yesterday's halving, many expected the price of bitcoin would penetrate $100k but that did not happen, however, every 4 year cycle, the price of bitcoin continues to increase sharply, it is very likely that bitcoin will touch $100k in the next few years so those who want to hold bitcoin in the long term should do so, don't have any doubts.

However, we can’t keep the assurance that bitcoin price will never experience price correction later on. The fact that it undergo a rapid growth, surely a rapid price decline will happen later on. Patience and faith with our investment are the keys.

the market correction that occurs in bitcoin is natural, the market is definitely saturated when the price of bitcoin has risen, so don't think that the decline in the price of bitcoin that occurs will be permanent, that's wrong.

[edward500]

I am still holding those 2 coins, although getting worried about bitcoin dropping after the halving. I was also worried about bitcoin dropping after the ETF's came out also.

[adaseb]

You are getting liquidity and volatility mixed up. Price has been relatively flat for the past couple of weeks with a few dips and pumps but overall not much movement. When etfs entered the game, they provided more liquidity. Since there is more liquidity there should be less volatility.

When a markets liquidity is low, you get high volatility because there are less buyers and sellers In the market. One person can easily control the price of the asset as long as they own a large amount.

[Poker Player]

I'm not surprised to see some of these threads on the forums but this one takes the cake. The OP worried about a supposed liquidity crunch to sell his two bitcoins, when the bitcoin market is extremely liquid, more for those amounts and open 24/7. There was liquidity crunch in 2008, what there is now with some rate hikes doesn't even remotely resemble it, just look at inflation is still rising.

So, if you want to sell, OP, sell, because at the end of the day we cannot be 100% sure how the price will go, although it will most likely go up over the next year, but not because of a supposed lack of liquidity that does not exist. sgbett has given you good advice as well.

[Sebas.tian]

What do you think, is there a liquidity crunch and it makes sense to sell now because sellers will come in soon to take advantage of these high prices? Or does it make sense to just hold at this point?

Selling your Bitcoin in this current price, I don't think it will give you exactly what you want from your holding, Because the high fees of Bitcoin is still higher and is making some holders to continue holding their Bitcoin until the high fees reduce before they can sell to achieve incomes. Since you used huge amount of capital to purchased Bitcoin last two years and hold till this season, you need to endure for the high fees to return back to normal, so that you will be proud of the income you are going to achieve from your holding, Because the price of Bitcoin is still high in the market for holders to accumulate incomes. It make sense OP, if you can continue holding your Bitcoin in your wallet but if you know your wallet is not safe for the Bitcoin, you can change them to safe wallet where they will be safe till the right time to sell appear.

[STT]

I dont see a problem the markets are bullish or we'd have fallen in price back to 30k possibly.   That erratic BTC price movement is quite normal and now its not there to such a large degree of change its a bit boring.   BTC still works out as a volatile asset but I believe the volatility is lower then its been in previous cycles, the development ongoing is bringing in a variety of operators with different objectives.

  Now we have ETF trustees who just want to collect a certain of BTC and charge a daily percentage fee for holding those BTC in trust and giving a tradable price to anyone who wants it.  Something a bit different but not too radical and on top of those market changes is the protocol itself and its usage by different people, it wont always be the same every year but I dont see a decline or any deterioration personally.

[philipma1957]

so the op purchased at 44k and is now around 126k

sweating a lot and hands want to let go.

but lets see sell 50k worth hold 76k worth and you are a sure winner

still have lots of coin in hodl mode more than one  all original money is back in his pocket.

[Ambatman]

I am still holding those 2 coins, although getting worried about bitcoin dropping after the halving. I was also worried about bitcoin dropping after the ETF's came out also.

Looking at your past posts you held when Bitcoin fell below your buying price and even bought another.
It all depends on your personal target and real life needs
You can choose to take some profit if you feeling scared but what's a year or two if you have already held since 2022.
Holding for a year plus  is proof that you don't implicitly need the money to survive
You can place a stop loss on $30-$35K your choice and if it ever falls below
Then you should still have a modest profit of around $20K.
But with amount like that holding Bitcoin would really net you profit that would be worth the waits and emotional battles.

so the op purchased at 44k and is now around 126k

sweating a lot and hands want to let go.

but lets see sell 50k worth hold 76k worth and you are a sure winner

still have lots of coin in hodl mode more than one  all original money is back in his pocket.

Your profit taking strategy do amazes me.
OP can choose to place stop loss below the $60K zone  selling the $50K worth since I believe it's been holding quite well.
And can choose to buy some again in another wallet if it falls way below the selling price
Nice merit by the way 7777
My favorite numbers.

[AmoreJaz]

I'm not surprised to see some of these threads on the forums but this one takes the cake. The OP worried about a supposed liquidity crunch to sell his two bitcoins, when the bitcoin market is extremely liquid, more for those amounts and open 24/7. There was liquidity crunch in 2008, what there is now with some rate hikes doesn't even remotely resemble it, just look at inflation is still rising.

So, if you want to sell, OP, sell, because at the end of the day we cannot be 100% sure how the price will go, although it will most likely go up over the next year, but not because of a supposed lack of liquidity that does not exist. sgbett has given you good advice as well.

I also don't understand why he is worried about the liquidity of this market. Remember, he is only holding 2BTCs as compared to millions of BTC in the market. And the market cap of this top coin is quite huge. As he already waited to grow the value of his btc holdings, why not wait a lil bit longer to further increase its value, that is, if he believes in this market.