Thoughts on Markets. Bulls, bears, and "is it priced in?"

in #finance4 months ago

I've been taking more time to make sure that I don't do something stupid this time around. I think the halving is going to push prices up. The common sentiment is that the market has already priced everything in. That's certainly a potential. I don't have a ton of experience here, so maybe my philosophy is wrong. I'm here to explore it. Not to provide financial gospel.

The reality I think I'm observing is that price is a dog fight between rich whales at all times trying to play the game. The rules of the game are pretty simple. Accumulate when it's low. Disperse when it's high. The players that are best able to do that are the ones that will make the most money. Most people will have money extracted by professionals. If you're lucky or living at the right cycle time maybe you'll get out ahead despite yourself.

Generally honest play I'd consider buying when it's low and selling when it's high. The alternative is to use your weight to force markets around. You can do this too. You probably don't have enough money to do it with a market like bitcoin, but my guess is that you have enough money to do it with some low liquidity coins on Steem Engine.

The way it works is that you accumulate at the bottom. If the price starts going up you sell what you own into the buy wall to push price back down. Yes, you sold a few, but hopefully you're accumulating more than what you were selling and at lower prices. The bigger the bear the more tokens you can shake out of people! They might be screaming in financial pain... but don't their poverty tears taste so good?

In a rough bear you shouldn't have to sell to much to make the sell wall crater. That makes it easier to accumulate. When you've accumulated as much at the lowest point of the market you can force it to go it's time to switch from being a bear to bull. You got yours... now it's time to pump it and dump it on other people. Stop selling into the buy wall and let prices rise organically. If you're feeling really fiesty look at all those people who are convinced you'll keep pushing prices down and are shorting the thing. Now you have a chance to push the price up, make them sell all their shorts at the price you're dictating and now you're making money on both sides of this. The short sellings are crying in financial pain, but don't those tears taste so delicious?

Now if you want to get extra fancy while you're at the bottom of this thing you should be making a splash about how bad the thing you're buying is. You should be telling people to steer clear and using alt accounts and proxies to purchase. If you have social media influencers that could be a great source of FUD. Hit them where it hurts. Then when you've accumulated enough it's time to change the narrative. Things are looking better. Life is looking good. Support the team. Ra ra!

When you're at the top you want to keep people locked into the buy so that you can sell off and they're stuck holding bags. So, you might want to spread some FUD about options of how folks could cash out.

One of the guys (Wyckoff) that was a leader in how markets top and how they bottom based his theories heavily on this rough narrative: rich professional investors with aggregated money make money by buying at hyperaccelerated bottoms and selling at hyperaccelerated tops. The more you can control and send prices to extremes the more you'll make!

What am I really saying here?

I'm not actually telling you that you should go manipulate markets on Steem Engine or other small exchanges. Go ahead. It can be fun. Maybe you'll make some money. Who knows? Maybe you'll go broke trying to learn how to play...

No, what I'm actually saying is that the big institutional guys are sitting there forcefully pushing prices down on an asset that has an inclination to rise. I'm of the opinion the bitcoin price hasn't priced in the halvening barely (that's a pun) at all. What we're seeing is the last harrah of the bears shoving price to get just a few more plus token btc scam selloff coins before they can let the price push higher.

They're buying up coins between 3k-8k. They're going to sell them to newbies at 50-100k. Maybe more. Depends on how good those players are at the game!

Am I an expert?

No. Not at all. I'm not actually giving any suggestions here so much as pointing out some tentative observations I'm exploring. So, don't go selling your house to buy crypto cause of me. This isn't meant to be financial advice so much as trying to figure out price swings out there and how I can start to understand the flow of money.

To summarize my observations: It's all a game. The game is called money. Your goal is to make money by buying artificially low and selling artificially high. People play it professionally. They are better than me, and I'm just now over the age of 40 starting to see how the game is played.

Have fun. It's a neat game. Try not to lose your shirt!


Buy a decent chunk of a promising new token, then sit on it for 4-5 years.
It's how I approached bitcoin, and its how I'm approaching STEEM.

I second that

My guess is that the fact that the halving wasn't priced in the previous two times is decent circumstantial evidence it isn't priced in this time as well.

To me, the reason it goes up is simply supply/demand economics.

You have a balance of buyers and sellers to keep prices relatively flat prior to the halving. The sellers include the new emissions with each block.

The current demand levels roughly offset those sellers in order to keep prices relatively flat.

If you remove half of the new emission rate, yet the demand stays flat, goes up, or simply doesn't go down as much as the emission rate decrease, the price has to go up.

When the price starts going up, traders and speculators jump in and prices end up going higher than they should.

Poof, post halving euphoric rally!

As it relates to altcoins...

First bitcoin then the altcoins.

Gains made in bitcoin will eventually want to be diversified out into other assets. In some countries moving from bitcoin to other cryptocurrencies is not a taxable event. Plus you have retail getting into crypto due to the excitement bitcoin is causing as it makes new high after new high and they tend to want to catch "the next bitcoin"... IE the small, cheap, altcoin that has more upside potential.

Poof, altseason is here!

OK. I think I can understand this (sound of trumpets playing in the background). Thanks for the 101 explanation.

Now, about the halvening . . . is that something that btc wrote into their white paper? Does it mean they are going to burn half their coins? Would that be like the Bank of England burning half of all the sterling in it's vaults?

I daren't ask . . . 😂 and why would they do that?

And please don't say to stop inflation. That's way above my understanding at this point. 😂

Oh yeah, about low liquidity coins on Steem-Engine. Is that coins that don't trade alot? And isn't that true of all coins on Steem-Engine? 😂

It was part of Satoshi's original code. Every 4 years, the block reward is cut in half. We all know its coming, we just don't know if others are taking it into account yet.

Thanks for responding. 😁

the block reward is cut in half

does that mean that the people mining it get half what they were getting before?

if others are taking it into account yet

why does that matter? i.e. what would they do differently if they were taking it into account and who are these "others"?

every 10 minutes a new block is mined and added to the chain. When that happens 12.5 bitcoin are released to the miners. That means 1800 new bitcoin are minted every day.
Sometime in the middle of May the block rewards will halve. That means means that instead of 12.5 it'll be 6.25 and the daily amount of btc minted will drop to 900.

Miners typically sell because they have to pay for their electricity. So, for easy math we'll call btc 10k. When there's 1800 a day there's 18M USD that gets sold on the market from miners. When there's only 900 a day the weakest miners get rekt, a much smaller amount of bitcoin is produced, there's only 9M USD a day of selling generated from teh miners, but presumably there's still 18M worth of demand. So, price starts climbing, or at least that's the bullish argument.

Wow. Thanks so much @aggroed. That's fascinating and you expxlained it in a way that I can understand it. How refreshing!

every 10 minutes a new block is mined and added to the chain

What's the Steem equivalent of that. Is it something to do with "proof of brain" or is that something else entirely?

You mine steem too. You just do some brainy blog post to mine rather than run a server. Steem has an inflation pool and it shrinks every year. So, we don't have a halvening. We have a an annual decrease of half a percent. We started at 10% and it'll go to ~1% of 18 years or so. I don't know the exact number now. But we're under 9% inflation.

So we're wondering if those anticipating that the halvening will increase the price (pretty much everyone) have already started valuing bitcoin more.
We know its 111 days away, so has this price increase already happened?

Got it. Thanks! 😍

so has this price increase already happened?

So it could be that investors are buying now before the anticipated price rise as described by Aggy and as a result they could be inflating the price such that it won't rise so much come May.

Or it could be as @jrcornel speculates.

Either way, I'm not buying any. Might get some more Steem though, if the price comes down again.

Aggy says:

People play it professionally. They are better than me

I suspect that my grandkids would be better than me. Especially if my luck with crypto is equal to my luck with packopenings/reward cards. 😂

I tried to sell my tokens on steem-engine but the order doesn't get filled due to low volume there. Sometimes the prices shown there are really high but I can't sell at those prices, don't know why?

Very good thoughts here, I agree about the money game aspect. I am accumulating BTC by myself :)
On the long run however, what is the purpose of gaining more and more money (I mean especially the people who are whales already)? They can´t take it with them in the grave.

Patience can help a lot when you play the money game.
Prices are low in steem-engine.
Good timing to buy.
#steem is trying to pull another string again.
Can't wait to see a dollar steem.
Keep on positn'

Posted via Steemleo | A Decentralized Community for Investors

After this post....PALnet tokens shoot up to 1000 steem and Then down to .01 steem and back to where they are at....😆

I think the most likely scenario is that had we not overreached in 2017, we’d be sitting at a price where the halving was factored in.... somewhere between where we are now and the all time high, probably higher than lower. But I’m just some dude guessing like everyone else, right?

Nice analysis there buddy, buy low, sell higher, that's it.
DCA all the way. Buy in bit by bit and hodl for a few years and invariably after the halving price will climb, as it did twice before - we presume. However, each time is similar but can be different under the unique circumstances of the day. Let's hope this time around we have one more pump left in bitcoin, it may be the last big one of them all...

swim with the sharks and your going to get ...

It's interesting, but I don't think most people realize that every time you make money off trading it's usually because someone else is making it and if you lose money it's because someone else has made it.

It would be interesting to see someone write an article who tried to become a market maker on Steem-Engine with one of the community coins and how much money it actually takes or doesn't take.

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It's all fun and games until someone loses a Bitcoin.

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