Have you noticed the crypto market does not move quite the same as it used to? Maybe you felt something was different but you could not quite figure it out. I am going to go over a few theories I have developed on how Wall Street traders are creating opportunities for themselves in crypto trading and we are the targets.
(credit: dailypop/wordpress)
This article is focused on day trading and swing trading, if you are a HODLer you are safe from Wall Street's gimmicks but it does not hurt to dive deeper into the subject.
(credit: cloudinary.com)
You may remember this past December, it was announced that Bitcoin would be available for Wall Street to trade, including Bitcoin options. This article announced Goldman Sachs entering the crypto arena.
http://fortune.com/2017/12/21/goldman-sachs-bitcoin/
What we did not know at the time is what was fueling the rapid rise in the price of Bitcoin, where November 19th $BTC was trading at $8,000 and just 30 days later it peaked at about $19,400, was Wall Street setting up a massive opportunity to buy sell options on Bitcoin. They fueled the frenzy, and just as everyone started dreaming, they bought huge amounts of sell options, just prior to unloading all the $btc they had accumulated to initiate a perfectly timed downtrend.
(credit: bitcoinprice.org)
The good news for us is that was there one big ha rah, not to say they are done sticking their hands in the cookie jar, but as far as premeditated coordination goes, nothing will be bigger for them then that was.
(credit: quantshare.com)
Also, I want you to look at how hard and how fast Bitcoin spikes on that yearly graph in both directions. This will be the pattern you will continue to see over and over again in other crypto coins, except on the daily charts for them. Since Wall Street(and other whales) do not have their usual tools available through the stock market, such as options on other crypto coins, they have been mimicking their first huge play, and will continue to do so until it stops working. Here are some examples but these patterns are everywhere right now.
By quickly buying up a coin, often accompanied by some minor news, they are creating a buying frenzy for many novice traders, as they see the price shoot up fast. However, since all the buying is done so fast, unless you had the coin before the movement, you will likely not catch any upside.
(vancouversun.com)
Here is where it gets ugly. We are used to things going up fast and coming down fast, but then we are used to a lot of movement after that down tick, in both directions. However, since this is all a show, they dont even fake much buying pressure, and just dump everything they just bought into the little frenzy they just created. It is working for them, but there are ways to combat it, and profit.
The first, and easiest, is to just buy and hold coins in your favorite crypto projects. Professional traders NEED you to make trades to have a chance to make money off of you, so by just holding, you block any possibility of a shake down.
The other way, and I think this strategy is becoming critical in profiting off of the market, is to set sell orders on your short term trades at your target sell price(I suggest 5-15% profit area), this way you will be able to capitalize off of the quick up and down of the coin price as it gets pumped and dumped. Legitimate volume would not erode the price back to it's pre-increased volume price so quickly.
(credit: microcapclub.com)
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The only thing that has always remained the same about the crypto game is that the crypto game is always changing.
Should I still be purchasing bitcoin?
Yes. Now is a great time to get some. Bitcoin is going to $100,000 and beyond.
Interesting and insightful article! It has definitely been an interesting ride!
This is basically describing moment which is often found in commodities such as gold, silver, oil, etc.
I wonder how well a typical momentum model could be adapted to BTC in order to optimize the buy/sell guidelines...
You have already peaked my interest. Will look into it!
Resteemed btw
Now that some months have passed I can see that what you say is even more true. The Wall Street traders really have changed the game.
So far the Wall Street are winning the games and they have succeeded in taking out the weak-handed newbies after the huge correction. I don't see another hype yet, so maybe this recent rise is a bull trap that the whales are setting up. Do you think it is organic? For me, I'd rather see a 10-20 percent growth per year so that newbies will not discouraged by the pump and dump situation. Because I believe that BTC should be for all of us and whales should stop their (pardon me for the word) 'dirty gimmicks'.
I think it is a mistake to think along the lines of the stock market with % gains with Bitcoin. I truly believe that Bitcoin will become the World's most preferred currency some time in the future. It will be something that everyone has, because it makes their lives easier. When that day comes, Bitcoin will be over $100,000.
I don't trade Bitcoin, that is the one coin I only HODL. When you know where something is going, it does not matter how it gets there!
Also, the price going higher is what gets whales to sell.
Nice Post! Thanks for sharing, Resteeming.
Thank you and thank you.
I see 3 main problems when it comes to BTC trading / investing / institutional money:
We don't know how much bitcoin is in the market, and how much of it is just stuck in long term investors accounts. Or even has been lost, due to losses of wallet keys. Imagine if 16.8 mln BTC totally mined by now, but 20-30% are available to buy. Or imagine if only 5-10% only available to buy / sell. This is game changing stats.... very important stats.
Continuing from the point 1, 2017 was the year when Bitcoin was brought to the masses. Some can argue that, but just look at CNBC, they have a spacial ticker for BTC, news papers writing articles about BTC from time to time. So Wall Street is inevitably in the Crypto market too. And what we see, is a massive manupulation, with big swings up and down. I would not be surprised if J.Dimon made special crypto trading team, a special department in his bank too. So the market is to small, for now, and even comparing small amounts (few billion dollars) can push the BTC price sideways....
Regulations. They are not there yet, so some people are still hiding their crypto investing / trading activity. Some people are on hold even to start investing into it, as the media itself spreads very mixed reviews (FUD) whether cryptos are great, or they are total scam. Funny enought how this swings from one extreme to another. As we can see different countries approach the crypto space in different ways: Japan / Switzherlan / Venezuela / South Korea / China / USA / etc etc. Some countries are more pro, others are banning what is related to cryptos.
But the goods news: the blockchain is penetrating the space. Companies are implementing it. Together that brings Bitcoin into the spotlight, and inevitably companies have to look into BTC, as the this is the oldest open source code which has been around. 9 Years, and no one hacked it, no one stole anything from BTC, no one cracked it, or even stopped it for a second. So for the future I am very optimistic what's coming!
i am totally confused this days like how this crypto system is working nowadays..
its really seems to be on a roller coaster @gank
So the big guys are still playing there games. Not good!
Incredible analysis, I gain deep insight from your message as a newbie!
Thank you, I am happy to help.
I really do..
Great, well thought article. Thanks!
HODLers always win!
holder = patient
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