Bitcoin is a market of supply and demand. Pure economics devoid of government influence. Some would say Capitalism at its finest. Was it invented in the home of capitalism? probably not. Who controls the supply? Well I thik we can all agree on that. Chinese miners are by far the largest player and if this last year of political wrangling has taught us anything, it is that the state controls everything in China down to the last detail. They will drag you from your home to stop a virus and will invent sites like Tik Tok to mine your personal preferences. So why wouldnt they have a hand in controlling the crypto space. its been a long road for them to lure in the bigger money but im guessing beating the US at pure capitalism is quite a prize.
So where are at the moment. In recent months several large..ish hedge funds have invested reasonable figures in Bitcoin...and removed a chunk of liquidity from the exchanges. The price is now heavily weighted to the supply side in the short term. This is why we see no organic rise in volume. In fact volume is at 50%ish of the run to 20K.
Usually you would see the miners, (controlled mainly in China) fuelling the supply side of the curve. Selling their new coin to pay the bills and make some profit. But they aren't...well only enough to service the demand and squeeze the price higher.
Where will it go...the price that is...who knows.. This is a game of cat and mouse...by Geo-political opposites. I would suggest to any small retail investor to stay the hell away. If your in, take your profit but many wont...greed doesnt work that way. Supply is King and when the trigger is pulled it'll fall fastr than the north tower Gehko proclaimed that 'greed is good, greed works'. In this instance I think it does untilsomeone says it doesnt and when the Chinese decide to pull the trigger, they will be holding an awful lot of dollars that once belonged to American hedge fund investors...
Happy New Year to all...dont play with anything you cant kiss goodbye to...and still sleep soundly.
You are smart to try to weed out weak longs based on a Chinese scare since retail investors are so sensitive to CCP, esp after BABA last week.
This will allow you to buy at lower support levels that will be hit on the way down. You know, all those levels you missed on this first ride up. At least you'll get a chance to be there for the real bounce.
flai54
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@theworldinscents, So are you saying when that the next major correction will weed out the longs so that it would force all the weak hands out to create more supply? What levels do you think it can get down to?
bitcointrader3764
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@flai54, for the purposes of this piece, if you assume there is anything to it...you can also summize that profit per se, is not important to the Chinese on an idealogical level. They can bleed longer and harder..and buy back at any price they want....they hold all the cards...
SIGPokerKing
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@flai54, I think weak hands will be weeded out beginning at 30k, but BTC corrections have routinely been sharp 30%-40%. 40% from 35k would bring BTC down to 21K, which is close to one of its support levels. But who knows with these cryptos, anything can hap[en and as you stated, the market can be manipulated, but not only by the Chinese, but by market-makers, too.
flai54
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@theworldinscents, I agree. But its going to take time for this to happen. Right now any dip below 30K will be an instant buy because there is no more psychological resistance of 30K. It will be interesting to see if any whales start taking profit especially those that got in earlier. I don't know how much effect a bunch of retail traders will impact the market vs some whales taking profit to assist the correction of price.
SIGPokerKing
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@flai54, Yes, whales are a complete unknown. Glad I dumped Grayscale ETHE last week, because it's moving in the opposite direction of ETHUSD by roughly 60% since the Dec 31 close. Guess the premium is quickly getting wrung out.
ericdabbs
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are u also saying that bitcoin in its fundamental core and purpose will be destroyed when its all said and done?
bitcointrader3764
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@ericdabbs, No...there is demand...so there is value and price. Im just making an observation that maybe that there is also a certain amount of central government control involved...and its not from the Americans. A 'pelican brief' if you will. if you agree that China has a controlling sphere..ask yourself what it their objective...and go fom there!
flai54
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@bitcointrader3764, I understand what you are saying. Never thought about this before. Appreciate the insight.
This will allow you to buy at lower support levels that will be hit on the way down. You know, all those levels you missed on this first ride up. At least you'll get a chance to be there for the real bounce.