In the last few months I've been watching the same pattern repeat over and over again. The prices of cryptocurrencies go up only to get slammed back down even further again. Prices rise to create a euphoria so people can buy at higher prices but that's always short lived because they drop back down, sometimes even further than the previous low.
When that happens people in the market panic and follow suit by selling their crypto assets. A good question to ask is who are these people who keep selling when price go up? The answer is simple, traders.
I wrote an article about a month ago where I described the differences between traders and hodlers and the strategies they each employ. In today's post I'm going to take what I wrote on that post even further based on what's unraveling in the cryptocurrency market currently. If you haven't yet, go have a read at the above mentioned post before continuing so that we're on the same page. Here's the post - Trader 👨💻 or Hodler ✊? Choose Wisely. 🤷♂️
This time around it's more obvious than ever that traders, including those employed by big institutions such as JP Morgan, are trying to get their hands on a very limited asset of the future - Your Cryptos. If there's one thing we should know by now is that these guys don't play fair to get what they want and if manipulating the market is what it takes then that's what they'll do.
Within a period of less than two months bitcoin has gone from a 47% market dominance to now over 53%. That is a huge gap created between it and alt-coins, not to mention the billions of dollars pouring into it. So when everybody is thinking we're in a bear market and people are losing money because of it. There is another side that is making tons of money in this "bear" market.
Now here's the kicker, not every trader is in on the scheme. In fact most traders in the crypto space are losing money trading because most of them do a lot of guess work. Yes, your favorite YouTube trader who keeps selling you trade calls is likely a fraud who's costing you money. Good traders know how to make money even in a bear market.
Less than two months ago the market cap of Bitcoin to Ethereum was at a ratio of 3:1 now it's at a 4:1 ratio. Meaning one of two things people are selling their ethereum but keeping their bitcoins or that more money is pouring into bitcoin. The latter is true in both instances because we know people are selling bitcoin but more are buying it. Which brings the question if more money is pouring into bitcoin why hasn't the price risen to show it?
Here's a scenario that's playing out at the moment. Every time bitcoin is at $6k (I explained this price in previous post) they buy and when it reaches $6.5k ± they sell. When this process is repeated over and over and over again they make more money and thus buy more bitcoins at $6k with the extra $500's they make. I applaud the ingenuity of the scheme really, if I were a trader I would probably do it too. So the quick answer to the previous question is manipulation.
By 'they' I mean the few traders/trading companies that have banded to pull this off. It's no secret there's a lot of rigging going on in cryptos especially with lower capped ones. Bitcoin's manipulation is on a grander scale as big institutions are involved and possibly even government. Why would they go through all this trouble? Well, it's because they realize that this is the future of money and he who controls the money has the power. I would advice you don't sell yours for a couple of bucks.
In my opinion this whole Bitcoin ETF decision by the SEC is another distraction from what's really going on in the market. Us pleading for crypto acceptance from a federal agency means we've missed the whole point of cryptocurrency or blockchain but that's a topic for another day. I say it is a distraction because everyone's focus is directed at the decision and any rumor that come from it moves the price in one direction or the other.
To make things worse, the SEC has decided to postpone their decision to next month. I guess they don't want to give up their edge just yet while there's more crypto to be had. We recently saw the power this decision has on bitcoin's price when it dropped from $7k to $6k within 48 hours of the SEC's decision to postpone. It is likely they'll continue to kick the can down the road well into 2019.
Talk about the perfect manipulation instrument, to me the SEC in this instance is like the trojan horse. It's disguised as a liberator when in reality it's an instrument there to f*ck us all and rob us out of our cryptos. Alt-coins are already dying off, ICO's are being reserved for accredited investors and crypto holders are being KYC'ed everywhere. It is a battle to the future and those who can't see will sadly fall out as they sell and this will all be a memory of what could've been.
What are your thoughts on this? I understand that it may sound like a far fetched conspiracy to some but it is closer to the truth than it may seem. Where there is money involved they'll always be someone trying to gain an edge by any means necessary. In its current state the cryptocurrency market is one of the best places to do so.
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