Why dumps are important - page 6. | Bitcointalksearch.org

taxmanmt5

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Quote from: Wowcoin on March 18, 2017, 04:27:25 AM

The decrease of bitcoin is especially important for traders and investors . Due to the bitcoin dump more and more are investing because investors await that bitcoin become cheap rates for them to buy. That why fump of bitcoin are so important.

Bitcoin dump and then pump are so very important for the traders as it keeps their interest intact and make it favorable for themselves by getting profits on buy low and sell high and repeating the cycle over and over again.

deisik

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Quote from: Hazir on March 18, 2017, 05:18:01 AM

I am not denying usefulness of a occasional dumps, they are like acting like a safety valve to overbought and bloated markets.
After dump the air is cleared and allows new blood to buy bitcoin - because entry point is much more acceptable.
But our final goal is to raise market cap of bitcoin to prevent price volatility and harsh pump&dump acts. We are not there yet

Rising market cap will in fact contribute to price volatility rather than prevent it

Since market cap just mechanically reflects the Bitcoin price (given that the supply of new coins is constant). I have been telling this literally for years already, and the current events (the price pumps and dumps as of recent) pretty well confirm the theory behind my claims. And it is not about the volatility increasing in absolute terms (as many may erroneously come to think), it is about rising volatility even in relative terms (i.e. when the price swings are termed in percentages to the value of price itself). In short, the price rise under fixed or diminishing supply of new coins inevitably causes so-called market thinning which is essentially synonymous with volatility

marketone

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Today trading market histories are completely based on dumps and pumps, the same rule applies to bitcoin also. When bitcoin is dumped, there are big chances that bitcoin will be distributed to many new users. In this way, the bitcoin market cap will increase and its credibility also increases and there are big chances when people are holding bitcoin the price bitcoin will surely increase.

zedicus

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Quote from: deisik on March 17, 2017, 04:54:30 AM

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

Indeed, since the price of bitcoin mainly depends on the traders itself. They are the reasons for the pump and dump of this coin. Although the news plays some role in its price ( good news means pump in price, and vice versa). I think it is minimal.

Now, because there are big traders who can manipulate its price (whether pump or dump it) and will make a chain reaction.

Usually they use this pump and dump strategy to generate a huge profit from buying and selling at a right time and by trolling newbie traders by means of panic selling and buying at the wrong time.

So, expect its price to reach $1300 again in the future or even surpass it.

Hazir

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I am not denying usefulness of a occasional dumps, they are like acting like a safety valve to overbought and bloated markets.
After dump the air is cleared and allows new blood to buy bitcoin - because entry point is much more acceptable.
But our final goal is to raise market cap of bitcoin to prevent price volatility and harsh pump&dump acts. We are not there yet.

deisik

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Quote from: panju1 on March 18, 2017, 12:25:00 AM

Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.
In other alt markets, lot of dumps are carried out by whales to depress the market and then pick up coins at a low rate. This is less likely to happen with bitcoins, though

That seems to be a misguided opinion

In fact, I'm rather inclined to think in the opposite direction. With most folks going to withhold their coins and given the limited supply of new coins, the Bitcoin market tends to be more prone to manipulation. In other words, there is not much growth in scale, and you seem to be confusing growth in prices with growth in "scale". I guess this is a mistake and your stance doesn't match well what happens in reality. In real life, higher prices at the basically the same amount of something traded (in this case, bitcoins) make markets thinner overall which facilitates manipulation, not prevents it (and this is irrespective of how many whales are there)

Wowcoin

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The decrease of bitcoin is especially important for traders and investors . Due to the bitcoin dump more and more are investing because investors await that bitcoin become cheap rates for them to buy. That why fump of bitcoin are so important.

deisik

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Quote from: Clement Kaliyar on March 18, 2017, 02:37:14 AM

Quote from: DomainMagnate on March 17, 2017, 05:41:21 AM

I believe a periodic dump is good for both traders and users of any crypto be it bitcoin or any other coin.
It allows more people to get hold of coin which is not possible because of high rates.

Traders do thrive in these sort of situations and they really like to see huge movements so that they can make the best possible profit in these sort of market but the problem comes when you are small time trader and when you enter the coin at a wrong time and if the market is going down you will end up losing a lot of money in it unless you have the courage to hold for a longer time and most of them sell when they see the market going down,it is the same with stock as well as the digital market

As the proverb goes, it's not all beer and skittles

It should be evident to anyone that there is no rose without a thorn, and as fast as the prices may climb they may crash even faster. But if things go massively awry, in the end you will lose only as much, i.e. as many dollars as you have put into Bitcoin. On the other hand, you don't necessarily need so much courage as to wait out the bad times. Small time traders should have courage to put stop losses here and there in the first place, and not be too greedy overall trying to squeeze tiny profits of smaller price movements. Though I don't really know whom exactly you refer to by these, i.e. day traders (as well as scalpers) or just wannabe traders

Clement Kaliyar

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Quote from: DomainMagnate on March 17, 2017, 05:41:21 AM

I believe a periodic dump is good for both traders and users of any crypto be it bitcoin or any other coin.
It allows more people to get hold of coin which is not possible because of high rates.

Traders do thrive in these sort of situations and they really like to see huge movements so that they can make the best possible profit in these sort of market but the problem comes when you are small time trader and when you enter the coin at a wrong time and if the market is going down you will end up losing a lot of money in it unless you have the courage to hold for a longer time and most of them sell when they see the market going down,it is the same with stock as well as the digital market.

BitDane

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I do agree that market needs some dumps for more spread. This is what helps Bitcoin to be stable, by bringing in more hands that will support the network and economy. Few people cannot sustain the system for very long time so they need much more people involved in it. With this, there will be more fund to flow in the economy and more people advertising Bitcoin to invite new comer to the Bitcoin ecosystem.

deisik

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Quote from: xypos on March 17, 2017, 11:32:54 PM

I am not sure whether or not a dump would necessarily be important or contribute at all to the Bitcoin environment. I mean let's face it we all hate dumps

If we are to really face it, not all people are greedy or impatient, and for me (and I guess many others as well) such dumps turn out to be an excellent opportunity to buy in and buy back what they sold at the highs. Just don't believe the bullshit that price is going to rise indefinitely

Quote from: xypos on March 17, 2017, 11:32:54 PM

But I really don't see a reason why a dump would make Bitcoin more stable over time. Yes the market reaction is reducing dramatically but the Bitcoin price level is still yet to be more stable than most small countries currencies. And we've got so many dumps that I can't even count them all

Did you read the opening post?

Dumps, especially dumps caused by big whales liquidating their stashes (i.e. not linked to events and news having a pervasive and all-embracing negative effect) lead to more even Bitcon distribution. In other words, with every dump there will be less and less whales, which makes Bitcoin less prone to abrupt and sharp plunges overall. Even if someone starts massively buying up bitcoins (like what the Winklevoss dudes did in their time), this will raise the price, and when they eventually choose to dump all their coins the price will still remain higher that their entry point. So the end result will still be more even distribution, which is a good thing on its own

panju1

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Right now, the Bitcoin market has achieved sufficient scale to prevent market manipulations.
In other alt markets, lot of dumps are carried out by whales to depress the market and then pick up coins at a low rate. This is less likely to happen with bitcoins, though.

xypos

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I am not sure whether or not a dump would necessarily be important or contribute at all to the Bitcoin environment. I mean let's face it we all hate dumps.

When you wake up like today and you see the Bitcoin price during that $1,000 value again you wondered yourself what the hell happened? What happened was really pure speculation. Traders live off the price inconsistencies between time and time.

But I really don't see a reason why a dump would make Bitcoin more stable over time. Yes the market reaction is reducing dramatically but the Bitcoin price level is still yet to be more stable than most small countries currencies. And we've got so many dumps that I can't even count them all.

RoommateAgreement

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Bazinga!

good point.
and from what i can see, i can tell that we are moving towards that too. if you compare the dumps and how price reacts things are changing, the volatility is not the same as say 3 years ago. whales are also way more careful with their dumps and manipulations and that shows they have lost money or at least can no longer acheive the same goals as before.

xuan87

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Quote from: bravehearth0319 on March 17, 2017, 08:33:05 AM

I'm not saying that dumps are important, maybe sometimes we need it. Because in the world of trading as I can see and observed, traders act most of the time if there is pump happening and when dump is happening too traders had a chance to buy again a cheap coins for them to wait for a chance to sell.

Of course dumps are important, traders make trade from the swinging price, bitcoin need a balance dump and pump so the price is stable, without dumping the transaction flow of bitcoin can be stagnant and dumping also makes the bitcoin price become cheaper so we have the opportunity to buy some coin and make some profit

Mometaskers

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I wouldn't mind the occasional dump. For many poorer people like me, it's really the only way to buy affordable bits. Sure some of the richer guys are also probably gonna benefit from gobbling up all those cheaper coins (some can even accuse them of triggering it to buy more coins) but at least more people get to grab some extra for themselves. I'm not well versed with the economics of stuff but I'd definitely buy during dumps rather than when it's on a rally.

bravehearth0319

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I'm not saying that dumps are important, maybe sometimes we need it. Because in the world of trading as I can see and observed, traders act most of the time if there is pump happening and when dump is happening too traders had a chance to buy again a cheap coins for them to wait for a chance to sell.

deisik

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Quote from: Xester on March 17, 2017, 07:41:03 AM

Quote from: deisik on March 17, 2017, 04:54:30 AM

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

In a way we cannot deny that dumps are important to small time and independent bitcoin holders. Dumps are the best way of taking over bitcoins from the huge whales and will make bitcoin be evenly distributed to all members in bitcoin community. If there will be no big whales in the bitcoin industry there will be no more pumps in the future and bitcoins price will be as stable as gold

Even if all 21M bitcoins were evenly distributed between all people, the prices wouldn't be as stable as the gold price

Since most people would just dump all their bitcoins for fiat immediately, and we would end up with a relatively small group of people (like now), some of which would have more coins than the rest of the pack. That will be enough to provide volatility higher than that of gold. We will always have a sort of Brownian motion (or random walk) around the base price even in the most extreme case of however even Bitcoin distribution

Though such distribution would be still impossible in real life

Xester

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Quote from: deisik on March 17, 2017, 04:54:30 AM

This is just a theory, so bear with me (constructive criticism is welcome)

And this theory asserts that Bitcoin dumps like what we've seen recently (i.e. today and right after the rejection of the Winklevoss ETF by the SEC) contribute to more even Bitcoin distribution over time and will help stabilize prices in the future (read make Bitcoin growth more consistent). What real world facts is this theory based on? We know that initially there were only a few users (so-called early adopters) who held the majority of coins, so they could easily move the price by dumping their stashes (at least, some part thereof). In the case of the lack of major news (either positive or negative), the price is pretty stable right now. So the only viable explanation for all of a sudden price crashes is most likely someone dumping huge amounts of coins (maybe, the bros themselves). This causes the price to plunge (even if momentarily). It is almost certain as well that the coins dumped are bought by a lot of independent traders, and therefore the wealth distribution is set to level out eventually. That's basically why dumps are important since they are caused via massive sell-offs by a relatively small number of large Bitcoin holders and get absorbed by the market

In a way we cannot deny that dumps are important to small time and independent bitcoin holders. Dumps are the best way of taking over bitcoins from the huge whales and will make bitcoin be evenly distributed to all members in bitcoin community. If there will be no big whales in the bitcoin industry there will be no more pumps in the future and bitcoins price will be as stable as gold.

Tuyul Gupies

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well if it's like this it looks like the pattern of the holder of bitcoin will change because after the dump occurred so many people have bitcoin for buying and selling process, which there are many to be reduced eventually so no equalization holder bitcoin, so the benefits of the dump it is also important to maintain continuity of bitcoin, so the market fixed path

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