EMC2 - a study in human psychology
Einsteinium (EMC2) is a cryptocurrency that I've had my eye on for a while, but I thought that market action today was pretty hilarious.
As @pawsdog continually mentions in his Crypto Trading Analysis reports, these markets are all about people reacting to news, to fears, to enthusiasm and to each other... and that all drives price action.
Einsteinium has been regarded pretty positively as a solid coin with a strong scientific approach, and has been trending upwards until about 2 weeks ago where it exploded. It's been a little bit all over the place since...
Yesterday morning, Einsteinium made a pre-announcement:
Tweet created at 10:45am West Coast time.
I actually expected this pre-announcement to increase the price, but it really didn't.
Buy the rumour, sell the news
News of future news literally did nothing for the price, and I hope there's a lesson in there for future coins.
Hour chart - 24 to 2 hours before the announcement
So... pre-announcement... no one cares.... until about 2 hours before the announcement.
15 minute chart - 4 or so hours before the announcement
In 45 minutes, the price action goes from $2.40ish to $2.79.
Again, human psychology, no one cared until someone cared and then everyone cared.
With 30 minutes before their announcement, people started taking their profit... which I honestly didn't expect... I thought it would keep climbing until midday.
15 minute chart - 8am to 11:30am
And then midday!
15 minute chart including midday
The price went from $2.79 to $1.24 in no time. This massive dump wasn't in reaction to the news... it was traders who had all decided to trade at 11:59am regardless of what happened. The news hadn't even come out at this stage.
Oddly, Einsteinium didn't make any announcements on Twitter at midday, they made their announcement on their website... and then didn't put that on Twitter for another 14 minutes:
Posted at 12:14pm
Now, the actual announcement is pretty cool technically, I'm happy with this direction they're headed... but the actual news is irrelevant.
Lessons learnt about crypto news
So FOMO, FUD and news don't follow the usual pathways of charting and technical analysis, they are a monster on their own. I've noticed so far, that pre-announcements generate positive price action, and then there is always a dump.
You'd expect that good news = good price, bad news = bad price... but what I'm finding is:
Promise of news = pump
News = dump
What do to in the future
If I see that a cryptocurrency that I'm interested in a long position in is making an announcement... I'll wait until the exact moment of the news is due... and then pick up coins during the inevitable dump.
I wasn't expecting such a dramatic dump, but I was watching and had funds ready. I picked up some EMC2 at $1.42... literally every second counted at that moment. The price at time of writing is $1.67 and it looks pretty undersold... so I'm hoping it slowly climbs back up to $2.40ish mark.
Anyway, thought I'd share this little dramatic adventure in Crypto... it's all about trying to predict what everyone else will do... I learnt so much in a couple of hours of watching.
Have you had a similar news/fomo/fud experience?
Ripple screwed me like this several times over. You were smart enough to get EMC during the dip.
The ripple swell got announced. Price started picking up gradually. An announcement by Bill Gates foundation on day one meant there was general optimism of a blast off. I bought quite a few more. But nothing like that happened. And just as the swell started coming to an end, everything just plummeted, leaving me with no time to get out..
Ahhhh.... I don't think smart is the word... I got done over by SALT a few weeks ago in a similar scenario (that news wasn't good, the announced delays and their coin dropped like crazy) so I was actually looking into this for the purpose of writing this post... and then just happened to have some spare coinage to pick up some super-cheap EMC2.
What I expected though, was a very gradual upwards trend towards the $2.40-$.2.70 range, and instead it's struggling around the $1.50-$1.60 range. It's just hanging around at prices it shot past two weeks ago... so looks like I'm in for the long haul.
The purpose of this article, was to see the effect that any sort of announcements have on the price action of a coin... now I just need to find a website that lists all the announcements timings...
Very interesting! I noticed something similar to this as well,albeit on a more drawn out scale, but didn't document it. I think Decentraland & MANA is a good example of this. Pump up pretty hard to about a day before the beginning of the land auction, then the price imploded by about 50%.
Definitely something to keep in mind. There is a large amount of people capitalizing on hype, essentially.
Thanks for the post.
Yeah, exactly!
I feel like there is a small percentage of long term holders who are excited about the technology implementation behind a coin... and then everyone else is just out for a quick buck... which is fine, as long as we can try and predict what they're going to do.
You're welcome... it was so interesting to watch.. I pretty much got no work done yesterday.
Work is way over-rated anyways.
Hahaha, if I play my crypto and Steem cards right....
Always buy on the dip! Thanks for the info
Dangerous strategy that will fuck you more often than help you.. Trying to play find the bottom, can be like diving into a bottomless well... I will get in the bus on the upswing.. no need to ride it down the hill, down another then off the face of a cliff into the dirt...
Also I find that playing find the bottom imparts to much emotion into the equation, as you have to leave your trading plan behind in order to start attempting to snap buy the bottom of something, which most often you do at market so your down .0025 percent from the rip, or basically a little more than a $1.00 move upwards on LTC to break even, another dollar if you market sell and $2-5 on ETH. I will set a buy at a level I like and if I comfortably I'll take it zero fee as a maker not a taker, if I don't like I'll dump on the rebound..
Ha. I was going to reply with something similarly... in that the dip is always obvious after the fact...
Sweet find, and good eyes.. really good eyes and an excellent analysis.. Crypto tends to defy the charts much of the time. If reminds me trading penny stocks. You also have such a proliferation of unsophisticated traders in the market that the same traps work over and over so why would big money change them. In many instances what should happen and what does happen are completely contrary to each other.. I look at the lesser alts on occasion but when i can double my money every 4 months or so on the big 3 I usually stay in my area of expertise and don't get greedy.. greed will get you slaughtered...@pawsdog
Thanks! It was more an experiment because of something I noticed on a similar coin a few weeks back. I'm definitely going to try and keep an ear out for future announcements to see if I can find some sort of pattern.
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