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

Smack That Ace

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Quote from: mirakal on September 30, 2024, 08:34:17 AM

Quote from: Smack That Ace on September 30, 2024, 01:12:37 AM

Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

Emmanuelex

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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.

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Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

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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'.

EL MOHA

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Quote from: Alpha Marine on September 30, 2024, 06:31:06 PM

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.

Nwada001

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Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

Alpha Marine

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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.

hypersonic1

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Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

lionheart78

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Quote from: Smack That Ace on September 30, 2024, 01:12:37 AM

Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

yhiaali3

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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.

goldkingcoiner

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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.

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Quote from: stadus on September 30, 2024, 12:08:26 AM

~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.

Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

Don Pedro Dinero

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Quote from: stadus on September 30, 2024, 12:08:26 AM

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?.....

First of all, I don't quite see how the title relates to what you are asking, but in this respect, this was already said four years ago and look at the volatility we had. The logical thing is that as the market cap becomes bigger and big players enter the market that are going to hold basically as Michael Saylor does, the price will not fluctuate as much, but that will be at the cost of losing profitability as well.

In any case I think it will be a slow process, I don't think we will see it stabilise at the S&P level in this same cycle.

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Quote from: davis196 on September 30, 2024, 02:19:17 AM

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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?.....

If the Bitcoin/crypto market becomes "boring", most investors would run away. Price volatility is what makes the market interesting to the investors. The pump-and-dump nature of the crypto market will never go away. Market liquidity is constantly going in and getting out, which pumps the prices up or crashes them down. The army of BTC "HODLers" won't let the price collapse to extreme levels and the new money, that would enter the BTC market would trigger another FOMO phase.
The "buy the rumor, sell the news" method would never go away from any financial market(it doesn't matter if it's stocks, FOREX or crypto).
There was massive hype around the Blackrock Bitcoin ETF and the 2024 Bitcoin halving, which caused the BTC price to hit 73K USD.

I don't think the crypto market will be less volatile because we are still a free market and there is not too much regulation yet. But with bitcoin it could be different because bitcoin ETFs have been approved, large investment funds have joined and they are under the control of law enforcement agencies. But for bitcoin to become as stable as gold, that certainly hasn't happened yet and won't happen anytime soon, but we probably won't see bitcoin drop 70-80% in value like previous bear seasons. Volatility will definitely decrease significantly.

“Buy the rumor, sell the news” still exists in the markets but things don’t always work that way, they are becoming more unpredictable.

Pmalek

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Quote from: mirakal on September 30, 2024, 08:34:17 AM

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.

Volatility also depends on the hands owning the coins. Too much centralization within a few huge investment companies isn't good either. And that is also where we are heading to. ETFs buy more bitcoin in a given timeframe than was mined during that same period. If they and their investors started selling or changed their minds on bitcoin (for whatever reason), the bear market would be in full swing.

mirakal

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Quote from: Smack That Ace on September 30, 2024, 01:12:37 AM

Quote from: stadus on September 30, 2024, 12:08:26 AM

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.

Pmalek

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Perhaps it wasn't the best day to create this thread, when we look at the current price and what it was just one day ago. We were close to $66k last night and from there the price dropped down to $63k. I haven't been paying too close of attention to the reasons, but I have seen speculations that it's related to the speech of US Fed Chairman Jerome Powell on the economy and monetary policy and and FUD related to payout distribution of FTX funds. Bad news still knows how to catch Bitcoin off-guard unfortunately.

dansus021

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Why "Buy the Rumor, Sell the News" is Fading in Bitcoin Trading? Maybe bitcoin now is too big the big bank the big companies heck even now a country involving in Bitcoin and the way like it used to not gonna work anymore but I saw bitcoin now had more relation with economy news just like the forex did. the bitcoin correlation same as gold sometimes.

AVE5

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Quote from: stadus on September 30, 2024, 12:08:26 AM

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?.....

I think the approval application of the Etf was submitted and same time there's been numerous of investors buying huge amounts of bitcoin including the institutional investors which has begot the enticement of the current market rate unlike some sentimental experiences we've had recently.
The blackrock is a promising increase for mini investors as a case of the higher demands of investors stoning the market leading to had lead to the faded dump but if the approval is trashed, then we may experience stagnant values but less dump u like recently.

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Quote from: davis196 on September 30, 2024, 02:19:17 AM

If the Bitcoin/crypto market becomes "boring", most investors would run away. Price volatility is what makes the market interesting to the investors.

They will stay as there are many investors, traders in stock market or gold market with lower volatility. Lower volatility will make Bitcoin less attractive than previous years but it is natural because times for x100, x1000 or higher with Bitcoin investment is long gone but if investors can hold their bitcoin a long time, they will get very good profit, better than gold or stocks.

It's because Bitcoin total supply is 21 millions, not more, and many bitcoins were considered to be lost. We don't know exact number of lost bitcoins but many bitcoins were lost by many people, it reduces circulating supply to less than 21 millions.

Bitcoin inflation rate now is 1.7%.
https://charts.woobull.com/bitcoin-inflation/

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The pump-and-dump nature of the crypto market will never go away.

Cryptocurrencies (altcoins) are pump and dump coins, Bitcoin is not.

icalical

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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.

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