Why "Buy the Rumor, Sell the News" is Fading in Bitcoin Trading?

[Lucius]

~snip~
Recently, I’ve noticed something different, like with the ETF example. Before it was approved, traders and investors were highly optimistic that once it got the green light, Bitcoin would "go to the moon." The application process for a Bitcoin ETF started back in 2013, /with many applications eventually approved , but this recent one is the biggest.

All that was approved before spot ETFs are so-called futures ETFs, and they could never influence the price in a more positive sense because they do not trade with real BTC. The approval of these others had an effect on the price, but as we can see, most of these investors do not invest in the long term, because BTC is interesting to them for the reason that they can profit much more in a very short period of time than with most other investments.

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

For now, it seems that the price has relatively stabilized, but one should not lose sight of the fact that those who invest a lot of money in BTC can profit even with a price change of only 5%, while smaller investors may think that they are in a "boring" period. I think that we are currently in a period of great expectation in the sense that most people are hoping for a big bull run, and I think that this is an important factor in reflecting the stability of the price - because some say that about 75% of all mined BTC has not moved for some time, which (if it is true) speaks in support of it.

[goldkingcoiner]

Right now the only ones who have the luxury of selling/buying the news are the insiders. But I think the price goes down and up too fast for anyone to make a decision on whether to use the news to buy/sell. For me the news is more of a general long-term prediction tool but is meaningless without the necessary TA.

[yhiaali3]

Yes, it is clear that the rule of "buy the rumor and sell the news" in Bitcoin trading is starting to fade, I cannot pinpoint one reason for this because there are many reasons but most likely the main reason is the entry of large institutions.

The entry of large institutions, especially ETF companies, has made the market more stable and the great stress that used to happen because of whales has lessened its impact because there are many whales and large institutions that own huge amounts of Bitcoin and make this manipulation very difficult.

[lionheart78]

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

That has been happening, bitcoin is gradually becoming more stable over time and we can easily see that through its yearly growth chart. Bitcoin's returns have been decreasing over time and it wouldn't be surprising if Bitcoin one day becomes as stable and less volatile as gold. But in return, that would make bitcoin safer like gold is today.

The more mature Bitcoin becomes, the less volatile it becomes, and that makes it less attractive to speculators looking to get rich quickly. But it will become the preferred choice of those looking for a store of value, a safe haven, or it could be legalized and recognized as a global means of payment like the original purpose for which Satoshi created it.

Not only that traders and investors are getting smarter.  They have seen different situations in the entire history of the Bitcoin market and is not easily affected or hyped anymore.  With the institutions getting involved, the market become stable and trading in a more conservative manner.  Also the algorithm and settings of trading bots are getting advance making much more intelligent decision in stop losses situation.

The effect of anything always subject to the law of diminishing returns. Just like the buy the rumor and sell the news stuff, the more frequent it is used the lesser the impact will be.

[hypersonic1]

It’s been a while since we’ve seen a significant pump in the Bitcoin market, unlike in the past when pump-and-dump trends were common. If I recall correctly, any news involving government approval would cause a pump in price, while negative news, like China’s Bitcoin ban in the past, would trigger a dump, but these effects were usually temporary.

Recently, I’ve noticed something different, like with the ETF example. Before it was approved, traders and investors were highly optimistic that once it got the green light, Bitcoin would "go to the moon." The application process for a Bitcoin ETF started back in 2013, /with many applications eventually approved , but this recent one is the biggest.

When BlackRock announced their application for a spot Bitcoin ETF on June 15, 2023, it pumped Bitcoin’s price, and then there was another surge from the false report of approval.

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

The larger events like the halving still produce long brooding pumps based on emotion that can be counted on. However now we have some insane whales that have jumped in with the new spot ETFs. Instead of seeing quick spikes like the market had in 2018 and earlier the peaks and valleys of volatility will smooth out based on how the whales shift in the "ocean". The good news is that grass roots adoption is still in my opinion stronger than the whales.

[Alpha Marine]

I think people have learned to trust bitcoin more. People are not longer scared by rumors like they used to. I'm not saying FUD doesn't exist anymore, but it's not as bad as it used to.
If it was before and the German government decides to sell all it's bitcoin, there will be so much panicking and dumping, but this time around, even though there was FUD, it wasn't as bad as it used and it recovered quickly.
More people now have a better understanding of bitcoin so a few cheap rumours or news will not make them panic sell their bitcoin.
There's also the fact that more people look at the long term when it comes to bitcoin investment so they don't sell at every little dump or pump.

[Nwada001]

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

What I feel and think of the market is that people are no longer moved so much by such news. Back then, any little negative news can be able to put fear in the minds of the people, where they will think that such a big government sanction can be able to collapse the bitcoin price, which is part of the reason why they panic sell. 
 
On the other hand, I also think that Bitcoin has grown up to the level that small volume can no longer manipulate the market so fast it can just cause a price increase of a few thousand, but seeing that 2X pump within some days of positive news is rare to happen again. 

[EL MOHA]

I think people have learned to trust bitcoin more. People are not longer scared by rumors like they used to. I'm not saying FUD doesn't exist anymore, but it's not as bad as it used to.
If it was before and the German government decides to sell all it's bitcoin, there will be so much panicking and dumping, but this time around, even though there was FUD, it wasn't as bad as it used and it recovered quickly.
More people now have a better understanding of bitcoin so a few cheap rumours or news will not make them panic sell their bitcoin.
There's also the fact that more people look at the long term when it comes to bitcoin investment so they don't sell at every little dump or pump.

I think there is no better word to describe it other than the volume of bitcoin holders aren’t like the past where only the few held bitcoin and even the others who held have smaller volume of it and it didn’t matter enough. The bitcoin holders have seen over the years that no matter how bitcoin dumps it usually pumps up back so they don’t get bother again about sale from an institution. Say for example a newly token now is been sold by a major holder then other weak hands will definitely panic and sell off.
So it is as you have said, there still exists weak hands on bitcoin, but to be sincere there are not like before. Even those who don’t have much are also stronger holders who are looking for long term gains and rumors like this institutional sales isn’t going to take them out.

[Reatim]

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market?

It is definitely one of the factors that make bitcoin have less price swings but I also think it has something to do with its price. Obviously with higher prices and higher liquidity, there will be lesser volatility in the market compared to when the prices are low and there is not much activity which accentuates the few buyers and sellers in the market resulting in large price movements.

And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

Who cares if it is boring? I think this is just going back to what bitcoin was initially intended for anyway. With a much stable price, bitcoin will be much recommended to be finally used as a currency for everyday transactions which is what a lot of bitcoin enthusiasts were aiming for anyway. I can understand that many are investors/traders and would enjoy with volatility, but I think there are still a long time before bitcoin truly stabilizes and the market becomes 'boring'.

[Emmanuelex]

The Bitcoin market is becoming more populated, and it has grown more than what it used to be years back, most people in the world today now knows about Bitcoin and cryptocurrency and a lot of them are getting in on it. The market is huge, and there has also been increase in the number of investors and users, so having the same rate of fluctuations as of before is not going to be possible. The market is no longer going to spike or drop as it used to do years back. We have seen series of events that would have let to huge increases in price in the past, but now it's never the same.
The market is moving towards stability. It's no longer like before when the market cap was small and few people holds the coins and are able to manipulate it.

[Smack That Ace]

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

That has been happening, bitcoin is gradually becoming more stable over time and we can easily see that through its yearly growth chart. Bitcoin's returns have been decreasing over time and it wouldn't be surprising if Bitcoin one day becomes as stable and less volatile as gold. But in return, that would make bitcoin safer like gold is today.

The more mature Bitcoin becomes, the less volatile it becomes, and that makes it less attractive to speculators looking to get rich quickly. But it will become the preferred choice of those looking for a store of value, a safe haven, or it could be legalized and recognized as a global means of payment like the original purpose for which Satoshi created it.

Less volatility means less thrill and excitement for us, because we all know that the only way to get rich faster is by means of high volatility. However, on the other hand, that will also lessen the worries and speculations most particularly for newbies as they’re most likely who are making noise in the market, while those early traders and investors are silently studying the market. But nevertheless, if adoption grows for bitcoin from big countries and institutions, surely the lessening of volatility will become unstoppable, which is actually where bitcoin is heading to.

In general, volatility will also have advantages and disadvantages and stability is similar, depending on the purpose of use and preferences of each person, we will have different perspectives.

But as a bitcoin investor and my purpose in entering this market is profit, honestly I don't expect bitcoin to become too stable. That would reduce the attractiveness to investors like me and that is something no investor wants. We always talk about decentralization, privacy, and complete control over our assets when talking about bitcoin but at the end of the day the only thing we care about on a daily basis is its price. So I believe not many people will be happy when bitcoin becomes stable. 

Sometimes I wonder, if bitcoin becomes stable, how many of us will continue to stick with bitcoin or quickly look for something else to replace it.

[OcTradism]

In general, volatility will also have advantages and disadvantages and stability is similar, depending on the purpose of use and preferences of each person, we will have different perspectives.

Volatility means both chance and risk, because price can grow sharply or fall dramatically.
Stability means nearly no chance of growth, like stable coins, you can not invest your money in stable coins and hope that your portfolio will increase in value.

But as a bitcoin investor and my purpose in entering this market is profit, honestly I don't expect bitcoin to become too stable.

If Bitcoin can grow sustainably with time, of course each market cycle has bullish and bearish years, nothing can rise forever without corrections and bear market, it's good enough as an investment asset.

Year by year, Bitcoin grows and if we ignore red years, we have very good growth of Bitcoin, that is exponential growth.
https://charts.bitbo.io/yearly-candles/

[lixer]

It’s true that the market seems less chaotic compared to the wild pump-and-dump days, but saying Bitcoin is now “stable” might be pushing it. Recent Bitcoin ETF inflows, especially BlackRock’s spot ETF, saw $184 million pumped into the market just last month, so there’s still volatility, but more institutional players are now driving it. While that brings some maturity, Bitcoin’s price swings are still significant, though less extreme than before. So, “boring”? Maybe not, but more controlled compared to past years.

I agree that it is not stable at all, people think that it's stable but it's long ways away from stable in the end. We are seeing ups and downs, yes it is not pump and dumps, it's ups and downs which is brilliant and I hope that this continues, but it is still volatile. Lets all remember what the low is for 2024 and what the high is for 2024, you will see that there is a major movement going on, and we also had all time high happen this year, and also went under 50k after that as well.

So it's clear that we are going to see a ton of problems on the long run, we need to consider that we are going to make some profits using this current volatility as well. When there is volatility, that means price will go down and up around similar times, so we can use it to buy when it goes down, and sell when it goes up, that is all trading is about. Trading is also great when something is volatile, it is not that good when it is stable, so bitcoin is not stable right now at all.

[YUriy1991]

Sometimes I wonder, if bitcoin becomes stable, how many of us will continue to stick with bitcoin or quickly look for something else to replace it.

That's true. It makes sense and is relevant, if the BTC price is stable of course it will not be considered attractive anymore by its users, both small scale and even buyers who come with large capital to be used as investment vehicles.

Today's small decline in BTC could be triggered by the release of data from ISM which is indicated as bad, thus triggering negative expectations for the accelerated performance of BTC prices. One more thing is the increase in world oil prices of around 3% at this time. We don't know what other plans they have, whether there will be talk of interest rate rationalization again in the future. Who knows.

[Tmoonz]

The market seems to be maturing now, particularly with the involvement of institutional investors like BlackRock. Their interest signifies a growing acceptance of Bitcoin as a legitimate asset class, and I think this is part of why we’re seeing less extreme volatility than before. Institutional investors tend to bring a more measured, long-term approach compared to retail traders, who often react emotionally to news.

As adoption grows and the market matures further, I do believe we’ll see less of the wild pump-and-dump behavior that was common in Bitcoin’s earlier days.

Surely Bitcoin has been showing more characteristics that befits making it as a long term investment rather than trading for a short term profit and I quite agree with you that will be less of the wild pump and dump behaviors infact it is already happening since when we experienced the last ATH, there has not really been much of the wild pump and dump character. However, even though anyone can do whatever they like with their asset, the truth must always be that, approaching Bitcoin investment for a long term perspective will always be the best compared to trading for short term profit maximization.

[SquirrelJulietGarden]

Surely Bitcoin has been showing more characteristics that befits making it as a long term investment rather than trading for a short term profit and I quite agree with you that will be less of the wild pump and dump behaviors infact it is already happening since when we experienced the last ATH, there has not really been much of the wild pump and dump character.

It is like double sides in the market.

The market needs to be lively so it needs to have traders with active trading daily. However it needs investors who bring capital in and out of the market and by supply and demand principle, if capital in is bigger than capital out, demand is bigger than supply, price will rise naturally.

Bitcoin is designed perfectly by Satoshi Nakamoto with its halving every 210,000 blocks (or in time equivalent of 4 years), and the halving year is a year of USA President Election. Noise and interests from community every four years are perfect to increase demand on Bitcoin, by new capital in from new investors and new traders every four year, every market cycle.

Even I am an investor and I see trading is risky, I admit that market needs both, traders and investors.

[Darker45]

I don't agree with the observation. We aren't heading toward a more stable price. Bitcoin remains volatile. As a matter of fact, just around 2 months ago, the price was $70,000. A week later, the price nosedived all the way down to $50,000. Less than 5 days thereafter, the price was above $61,000. Only to fall back to $53,000 after a month. And then just a few days ago, the price went above $66,000. But it went down to $60,000 hours ago. Right now, it's almost $62,000.

That's far from stable. Nothing has changed.

[Richbased]

So, to cut the story short, are we heading towards a more stable Bitcoin price now that institutional investors are entering the market? And if that’s the case, will the market become "boring," with less volatility as the pump-and-dump behavior fades? What are your thoughts on this?.....

No, i don't think that we are we are heading towards a more stable bitcoin price behavior because inasmuch as there are different factors that causes upwards and downwards movement in the price of bitcoin, it will continue to experience market fluctuations but what will be there is that it will neither experience extreme dump nor a heavy pump but for now since bitcoin is gaining more popularity we should experience more pump than dump till we get to a stage when bitcoin will become a part of our daily living then it won't get much excitement since majority of people will already be familiarize with the digital asset.

 Inasmuch as people still trade bitcoin with Fiats while others are HODLING, it will continue to experience market fluctuations because as people buy bitcoin others are selling but had it been bitcoin has gained full adoption and people start using it as a means of exchange from one bitcoin HODLER to another only then will there be a stability and balance in the price of bitcoin.

[kryptqnick]

How do we measure whether Bitcoin is or isn't getting less volatile? Which time period do we take as a basis? If it's the highest and lowest points over the course of 1 year, that's one picture. If we consider monthly changes, that's probably something else. Looking at Bitcoin over the last year, the lowest was below $27k, and the highest was $73k. Then another year into the past, it was below $17k and above $30k. There used to me more volatile years in the past, such as 2021 (I'm measuring from October to October), but also  periods of similar volatility level, such as between October 2019 and October 2020.
My point is that for now, I'm not sure if Bitcoin actually is getting less volatile. But over time, I believe that it can get less susceptible to news and less volatile. However, I think it's due to the increasing market capitalization and hence a difficulty of making a difference when so much money is involved, rather than due to institutional investors.

[TheUltraElite]

Prices have been stagnant over the 62k to 65k USD levels, so what? It will change but it will take time.

When big news come or even if they dont, still prices will fluctuate. At this point no big movement from large cap funds is happening and maybe that is the reason or maybe we are all wrong and people dont find trading that attractive as it was.

Either way it does not matter to long term hodlers. But if you are a flipper, you will feel the frustration.