Let's talk about the dump
Some people are still somewhat worried about the flash crash we recently experienced, and that is completely reasonable. In other words, I'm not blind to the problems, the obvious manipulation of the markets, but I don't think long term it will remain the same.
How are markets manipulated, you ask? Well it's not that difficult to understand. Whales, big whales that is, can bet against the price of a particular asset. They do this by leveraging their short positions on exchanges like bitmex. This means, in plain english, that they can gamble that the price will go down, using a 20x or sometimes more probability.
Since they have enough BTC to move markets, after placing such a bet, they can literally go into an exchange with enough volume, an exchange that is used for price discovery, and place gigantic sell walls that will scare the crap out of anyone who is actively trading.
I mean, imagine seeing a 2000 BTC sell wall, right above the current price. What would you do? Take profits, move to cash and wait for the dump. Now, imagine this snowballs, since more and more people will probably do the same, and imagine the stop losses, which are nothing more than programmed scripts being triggered. You see, it's literal manipulation.
Can this be fixed? Well, unfortunately the answer is not so clear. No market that I know of has completely eliminated manipulation. As a matter of fact, the legacy market is extremely manipulated, and there are people, scammers if you will, who even practice something called naked shorting. However, the size of the markets, makes it to where being rekt, so to speak, is not a common occurrence.
Eyes on the ball my friends... don't sweat these tremors too much, they are just that... tremors.
MenO
towards a year or two from now we'll definitely see some maturity in this market! they won't be able to hold on to that power for ever and it will be distributed gradually! :) <3
The more decentralized an asset becomes, the more immune it is to market manipulations. This means in 10 years the most decentralized coins will be quite valuable. Ironically, this decentralized value creates an incentive to centralize the coin, so it's a constant push and pull struggle.
agreed 100% we are just still early in the game, that's all.
My thoughts exactly, great post and I am definitely not worried.... What I don't understand is why the wealthy don't do this more often, seeing that we are in the wild wild west. I just hope that we can stay decentralized in the future.
The issue is that these are still immature markets and the volatility is just a factor that needs to be considered with this. Over time, this will become a more rational market as distribution and adoption improves.
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We need to be aligned with the market and complained will not change the behavior of it!
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Excellent review @meno and it seems to me that whales on the exchanges will always manipulate the market, this is an eternal problem!
⬆️⬇️ is the cycle of market it will be go as per it.
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Eventually a straw can break a camel's back, there is after all only so much the feeble human mind can tolerate before it snaps back to it's reality and says fuck this all. Hopefully the holistic crowd figures out a way to keep the capitalists the fuck out.... LoL. Idk, I could be wrong, but marketing and all is what I feel is causing the dips, with all the FUD and FOMO, along with fucking hodl armies...
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wow... super nice.
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