Topic: On stagnating prices (Read 385 times)
I thought if the price is stagnant like this, we need to be more careful because the price can go anywhere and we don't have any information or clue about that. So when we can stay aware of the price, and we can be careful, I think we can follow the price and even we can make a profit from the price movement. I only hope that if bitcoin price is stagnant, it will trigger the altcoin to moves and the moves will make the price increase higher.
Stagnating price is a good thing it means you can accumulate before the next bull run.
We’ve been here before after previously big corrections. Use it as a time to buy more coins.
We’ve been here before after previously big corrections. Use it as a time to buy more coins.
I think there is no need to panic, the movement is slow but for the next few months there will definitely be a change for the better.
Bitcoin is not slowly going up or slowly going down type of currency, it stays put for a whole time and than one day BOM it goes up or down. So do not be worried about the stagnancy because that is what bitcoin has been forever, ever since the early days price always stood still for long time periods and than changed all of a sudden
That's how the market fools the majority of traders
That is, at first the price starts to move in a rather narrow range, then people start complaining about the market being boring. In order to squeeze more profits they reduce their spreads and increase the size of their orders. And when there is enough liquidity on both sides of the price (as well as shorts), there comes a breakout, either way. People see that they either lost profit opportunities by selling too early or just lost money by setting their buy orders too high. It happens all the time as people can't override their psychology
Of course, you can earn both in a falling market and in a growing one, it all depends on your personal skills and your experience in margin trading. I can agree that most likely that bitcoin price does not grow at the moment precisely because a large number of traders actively use futures, so its can bring to situation when price of Bitcoin will not be too volatile for a long time.
There is nothing that is important happening in crypto right now and most of the time bitcoin doesn't change that much unless something big happens. You can see prices stay same for 6+ months and than one day it will change 30% and for a week there will be 50%+ changes.
Bitcoin is not slowly going up or slowly going down type of currency, it stays put for a whole time and than one day BOM it goes up or down. So do not be worried about the stagnancy because that is what bitcoin has been forever, ever since the early days price always stood still for long time periods and than changed all of a sudden.
The price is about the same for a while not and it hasn't moved much for a long time but lets assume SEC accepts bitcoin as securities and than BAKKT makes the ETF, all of a sudden bitcoin will go up like crazy.
Bitcoin is not slowly going up or slowly going down type of currency, it stays put for a whole time and than one day BOM it goes up or down. So do not be worried about the stagnancy because that is what bitcoin has been forever, ever since the early days price always stood still for long time periods and than changed all of a sudden.
The price is about the same for a while not and it hasn't moved much for a long time but lets assume SEC accepts bitcoin as securities and than BAKKT makes the ETF, all of a sudden bitcoin will go up like crazy.
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
But won't the short-sellers also lose interest if prices are stagnating? Short-sellers also have lending fees to pay for borrowing the coins used to short which might cause them to close their positions earlier
Your question is totally legit, so thanks for asking it
First of all, the interests rates at Bitfinex are negligible. Right now I have shorts in Litecoin, Bitcoin, ZCash, and it is only Litecoin interest rates that I can't just discard for fuck's sake. Interest rates on the other coins are below 1% yearly. As you can see, it is not really something you should care about as long as the market doesn't go against you. But if it does, then they will be your least concern anyway
Further, we shouldn't forget that prices are in a long-term downtrend, whether you like it or not. So the stagnating prices are actually a temporary stop before crashing lower. As you might remember, in October and early November prices had also been stagnating in the 6-7k range. But it was definitely worth keeping shorts open as in late November the price crashed two times. Hope this answers your question
We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while.
the question now is when will the purchase madness occur again? or maybe that madness won't happen again? now we face the effects of purchase madness, namely the feeling of being bored to buy.
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
But won't the short-sellers also lose interest if prices are stagnating? Short-sellers also have lending fees to pay for borrowing the coins used to short which might cause them to close their positions earlier.
I believe the "shorts" have no interest in planning on holding their positions the way the hodlers plan theirs. Will they really hold their short positions for as long as the hodlers can "buy and hold"?
the "stagnating" period in my opinion is the product of that manipulation and the fear that it causes. traders don't like a market which they can't predict so they make their exit and wait until things become more predictable and come back then. and until that time the volume shrinks and price stays the same
But that doesn't explain why prices are stagnating as in the circumstances you describe, the price should go lower. In other words, it is not possible for traders to exit and price to remain the same
by "exit" I mostly meant "stay away". all those who wanted to sell have already sold but they have not put their money back again. so we currently have a backlog of fiat waiting to enter but it is scared because of manipulations.
the "fresh money" is also either seeing the situation and decides to wait (out of fear or greed for possibility of lower price) or if it enters it will be crushed as whales dump and prevent the rise. that is why it is not rising yet and whenever we see a rise we also see a big sell off of large amounts by few whales not multiple small amounts from multiple people
Yeah, I also noticed that thing
That whenever there is a hint for a certain growth, it gets crushed immediately. Though I don't really think that there is some elaborate manipulation going on with somebody seeing that prices don't rise. More likely, it is a bunch of not related traders taking on this opportunity to open new shorts. And it is quite in line with my theory of cornered prices as when the price goes down, shorts get closed and thus prevent prices from falling further. Obviously, it can't last forever and we will likely continue to spiral down
the "stagnating" period in my opinion is the product of that manipulation and the fear that it causes. traders don't like a market which they can't predict so they make their exit and wait until things become more predictable and come back then. and until that time the volume shrinks and price stays the same
But that doesn't explain why prices are stagnating as in the circumstances you describe, the price should go lower. In other words, it is not possible for traders to exit and price to remain the same
by "exit" I mostly meant "stay away". all those who wanted to sell have already sold but they have not put their money back again. so we currently have a backlog of fiat waiting to enter but it is scared because of manipulations.
the "fresh money" is also either seeing the situation and decides to wait (out of fear or greed for possibility of lower price) or if it enters it will be crushed as whales dump and prevent the rise. that is why it is not rising yet and whenever we see a rise we also see a big sell off of large amounts by few whales not multiple small amounts from multiple people.
You should look at a minute chart since last rally, i.e. since January 8th. It mostly looks like this now:
As you can see, there is a sudden burst of activity when someone buys or sells a bunch of bitcoins (in this case sells), and then there's a flatline with insignificant trading activity, i.e. no one is selling and no one is buying anything in relevant amounts. See no volume? I don't see either. That was not the case just a month ago
As you can see, there is a sudden burst of activity when someone buys or sells a bunch of bitcoins (in this case sells), and then there's a flatline with insignificant trading activity, i.e. no one is selling and no one is buying anything in relevant amounts. See no volume? I don't see either. That was not the case just a month ago
I think you should stop looking at 1-min charts, LOL. That's just noise. The long term charts (2014 vs. 2018) are clearly indicative of very similar distribution cycles. Similar magnitude, similar shape, similar time period, and directly following a similar exponential rise. It's all very typical of what happens after an exuberant rally
I'm not going to argue over this issue any more
As only time will tell, if ever (but I will keep a watchful eye on this dynamic). Apart from that, as I already said, it is not of great concern to me per se because I'm more interested in exploring the possibility of shorts supporting the price in the narrow range at the moment. If this is the case, we should expect a further crash in the coming days as shorts are generally expected to drive prices down, not support them (long-term wise). But this effect is definitely something new to me (provided it exists and it is actually shorts at work)
We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while.
the question now is when will the purchase madness occur again? or maybe that madness won't happen again? now we face the effects of purchase madness, namely the feeling of being bored to buy. Obviously, no two charts will ever look exactly the same. These are just two different models for bear markets. 2014 was a constant slow bleed with occasional short squeezes and crashes. 2018 was was mostly bearish ranging with occasional short squeezes and crashes. The long term result is really quite the same though
You don't follow me
You should look at a minute chart since last rally, i.e. since January 8th. It mostly looks like this now:
As you can see, there is a sudden burst of activity when someone buys or sells a bunch of bitcoins (in this case sells), and then there's a flatline with insignificant trading activity, i.e. no one is selling and no one is buying anything in relevant amounts. See no volume? I don't see either. That was not the case just a month ago
I think you should stop looking at 1-min charts, LOL. That's just noise. The long term charts (2014 vs. 2018) are clearly indicative of very similar distribution cycles. Similar magnitude, similar shape, similar time period, and directly following a similar exponential rise. It's all very typical of what happens after an exuberant rally.
It's completely normal for range expansions to involve higher volume, followed by lower-volume consolidations. All markets trade like this including Bitcoin. What you're describing on the 1-min chart is just algorithm-driven activity and lack of activity from speculators. It's a boring consolidation.
It wasn't like that a month ago because we had just crashed from $6,000 in a high volume range expansion, waking up underwater investors, momentum traders, and higher time-frame trading bots. Range expansions expectedly cause high volume and volatility. This usually fades out into the more boring type of action we see now.
All in all, it means there is not much interest in Bitcoin now, and the price can be either locked within a short range or easily moved by a sufficient amount of shorts. But with shorts you can't rise, you can only fall further at the next shorting cycle which is to start when the majority of shorts get closed
There hasn't been much interest in Bitcoin in a very long time.
Eventually, once enough time has passed or a low enough price level is reached, new demand will begin trapping exuberant shorts. And we'll enter a new cycle.....
We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while
That doesn't explain why the price action is so restricted for so long
If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up
So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back
Why can it not? It's fact that price is a product of demand and supply. I think the big difference to 2015 is that the market is more established and well known now. Anyone who believes in btc has had the chance to be made aware of it and buy some, they've already invested and now don't have much more to invest. On the flip side, we've been bearish for a long time so anyone wanting to sell has had ample opportunity. The shear amount of dollar volume needed to move the price now compared to in 2015 explains why we don't see similar percentage swings
The price is always a product of demand and supply
So you can safely forget about it (I mean about it being a product of demand and supply). Regarding the part about "volume needed to move the price now compared to in 2015 explains why we don't see similar percentage swings", this is an obvious fallacy because you should look at the volume of bitcoins, not dollars
If your assumption were correct, it would be impossible to move Bitcoin's price at 20k as you would need 6x the amount of dollars that you need today. And the price swings at prices above 10k were downright insane, both in absolute and relative values (as they should have been)
That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic
Today it looks different
Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th).
Obviously, no two charts will ever look exactly the same. These are just two different models for bear markets. 2014 was a constant slow bleed with occasional short squeezes and crashes. 2018 was was mostly bearish ranging with occasional short squeezes and crashes. The long term result is really quite the same though
You don't follow me
You should look at a minute chart since last rally, i.e. since January 8th. It mostly looks like this now:
As you can see, there is a sudden burst of activity when someone buys or sells a bunch of bitcoins (in this case sells), and then there's a flatline with insignificant trading activity, i.e. no one is selling and no one is buying anything in relevant amounts. See no volume? I don't see either. That was not the case just a month ago
All in all, it means there is not much interest in Bitcoin now, and the price can be either locked within a short range or easily moved by a sufficient amount of shorts. But with shorts you can't rise, you can only fall further at the next shorting cycle which is to start when the majority of shorts get closed
We have stagnant prices because the buying frenzy is over (that ended in early 2018) and the panic selling frenzy has also appeared to stop, at least for a while
That doesn't explain why the price action is so restricted for so long
If you look at Bitcoin's volatility in 2013-2018, you will see that while there were periods when the price didn't change much, it still wasn't stagnant. And now we have Bitcoin's price which we hadn't seen till the fall of 2017, i.e. most of Bitcoin's history, and it is basically stuck in a very narrow range, which raises eyebrows. And there is a reason for that. The current situation may be called a "potential well" of sorts, so whenever there is a hint on a strong price movement, either strong resistance or strong support instantly builds up
So if you ask me, that can be explained only if you admit or take into account there is a massive amount of shorts at play, which limit the price action in both directions. Indeed, there is still a possibility of a breakout, either via extreme manipulation aimed at wiping away these shorts or via somebody actually having an intention to buy or sell enough bitcoins that no buying or selling wall will be able to hold back
Why can it not? It's fact that price is a product of demand and supply. I think the big difference to 2015 is that the market is more established and well known now. Anyone who believes in btc has had the chance to be made aware of it and buy some, they've already invested and now don't have much more to invest. On the flip side, we've been bearish for a long time so anyone wanting to sell has had ample opportunity. The shear amount of dollar volume needed to move the price now compared to in 2015 explains why we don't see similar percentage swings.
That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic
Today it looks different
Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th).
Obviously, no two charts will ever look exactly the same. These are just two different models for bear markets. 2014 was a constant slow bleed with occasional short squeezes and crashes. 2018 was was mostly bearish ranging with occasional short squeezes and crashes. The long term result is really quite the same though:
But that's not my major concern. If my theory is right and the current price levels are supported by shorts mostly, we may be in for a new crash like the one happened in November (after a new shorting cycle starts)
Yes, shorts are quite low right now, down to mid-November levels when the last crash began. It looks like the bounce from the low $3,000s may have just been a short squeeze. Bitfinex short levels in red:
You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic
Today it looks different
Even though I hope you turn out right in the end. If you look at the price charts, you will see a lot of price action back then as people were actively selling and buying. Nowadays it is mostly occasional bursts followed by flatlines, and it has been so since the beginning of the year (actually, after the rally which ended January 8th). But that's not my major concern. If my theory is right and the current price levels are supported by shorts mostly, we may be in for a new crash like the one happened in November (after a new shorting cycle starts)
It's just a matter of market cycles. This is a heavily hype and speculation-based market, so the accumulation and distribution phases are quite pronounced. Nobody should be surprised at a multi-year bear market after the length and magnitude of the 2015-2017 bull market.
You should also count in the effect of the 2016 halving
You may think that lack of interest would lead at first to a price crash, and then to a strong reversal. You may even hope for that and make your trading decisions based on such assumption. But it doesn't look like this anymore. Why so and how come? Basically because you can earn on the falling Bitcoin as easily as on the rising one, and at a certain price tag long orders become firmly balanced out with short orders
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
Such type of a market is possible when the interest in an asset is on the wane overall but the price is supported by the massive amount of shorts. It can be said that in these circumstances shorts take the place of the long term interest, but it is still an interest whichever way you look at it, even if it is a negative one. And ironically, it looks like it is able to support prices even though it can't drive them up (apart from short squeezes)
And the end result is stagnating prices, which is what we mostly see these days
That's exactly what the market looked like in 2014: waning interest, bleeding price, and a margin trading exchange (Bitfinex) dominating the market. This time it's Bitmex that's most dominant, but it's the same dynamic.
It's just a matter of market cycles. This is a heavily hype and speculation-based market, so the accumulation and distribution phases are quite pronounced. Nobody should be surprised at a multi-year bear market after the length and magnitude of the 2015-2017 bull market.
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