So, the bottom line is, both the rise and fall in Bitcoin
price action is exaggerated over other markers, not
just because of the small market cap, but also by mining.
price action is exaggerated over other markers, not
just because of the small market cap, but also by mining.
I've read your explanation and the mechanism itself doesn't seem illogical. However, is there any data to support your claims? If miners speculate, why would they speculate only during breakouts / breakdowns? I mean, they could speculate anytime on rising prices and sell coins only when they have to (to cover costs).
In my opinion, the small market cap is of high significance with the main contributing factor in Bitcoin's price movements being media reporting. Because Bitcoin is still only adopted by a comparatively small group of people, even a few new buyers will have a significant impact on price.
No data, just a theory.
You're right they could speculate anytime. You could easily argue
just the opposite of what I said. That since the price went up,
they are trying to dump more coins to earn more cash, including
coins they had previously stashed.
I just think there may be a large segment of miners that have
been dumping at a certain level during for a long time at a certain
level while the price was stable and now may choose to take a
a wait and see approach while keeping their fiat income flat,
meaning they are dumping less coins than before.
