Whales are having a fun week
It seems that the whales are having a good time pumping and dumping this week. It never ceases to amaze me how they can continually fool the market into doing whatever they want it to do.
They seem to be really clever at it as well. I am by no means any kind of analyst, but there seems to be some real psychological manipulation going on here.
It has happened over and over again year after year. A small number of people dump a bunch of coins and drop the price of BTC by double percentage points. An amount that would be absolutely disastrous for a traditional stock.
The pattern seems like this to me:
1: Whales dump the price down a little bit.
2: Normal holders get a little nervous but hold strong. They pump the price back up.
3: Whales dump even more, driving the price a bit lower than last dip
4: Normal holders a starting to bite their nails and think.. hmm Okay, I'll buy in the dip. They drive the price up again
5: Whales Dump price by double digit percentage points.
6: Normal holders are like "Oh shit! This is the end of the bull run! Sell Sell!!"
7: Whales ride it down then Whoosh, buy it back up.
But people are still freaking out and selling, so it keeps going down for a while as whales keep buying. Now the price trend reverses, and normal holders are stuck buying back in with a massive loss.
Constant Mental Pressure
This whole process can be extremely stressful for people who don't have deep pockets. They are desperate because they want to make it rich with crypto, but don't have an infinite stream of cash to 'buy in the dips', so they end up trading what they already have as the crazy market moves up and down. Of course this can be quite disastrous.
OMG! I need to get some ADA, it's mooning.. But I don't have any money.. Shit, gotta sell some BTC. Oh shit, BTC is mooning! gotta sell some ADA! Damn, but it is about to go through the roof. Ummm... Okay, I'll sell some Hive.. Shit! It just dropped though.. Okay, I'll take the loss because BTC is gonna moon faster. Oh shit, Hive is going up! Gotta buy some Hive. Damn, gotta sell some BTC to do that.
I think for most people without a never ending FIAT wallet, we have to just develop some kind of a plan and stick with it, barring some insane news that we cannot ignore, like a coin that you own being abandoned.
The problem today is that there are just too many potential projects to invest in. The list is never-ending. You have to have a plan and stick with it. Trying to jump on every train will just make you crazy! Believe me, I know first hand.
They say hindsight is 20/20, and it is a fact. If I could go back to 2016 when all I held was a ton of BTC and ETH, I would just leave it alone and never touch another crypto (I'd be a very rich man right now). Sometimes (most of the time) the best trade is the one you don't make. You chose to invest in that coin. Just leave it alone! Eventually (unless it was always a shit coin, of course) you will come out on top.
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If there is anything I have learnt so far it would be that missing out on a few gains is okay. It is impossible to keep up with everything especially in an industry like ours where everything is moving so fast.
I don't have the luxury to play the market so I invest my little earning in dividend tokens or defi projects I believe in (cub), while I stack some stable coins in preparation of a bear run.
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It's really easy to get caught up in the misery of missing out. I have come to the understanding that crypto trading is no different than any other addiction if you don't have your head in the right place!
Yeah, I've been stacking CUBs too! I also stopped selling my LEO and have been powering it up. Probably shouldn't have sold so much of it before; I would have gotten a bigger CUB airdrop. But oh well, once again - can't look back. Good idea with the stable coins too...
Great advice. I agree with you that there are just too many projects these days to keep up with all of them. I have a handful that I have significant holdings in and then the rest are just sprinkles here and there. Hopefully if one of them pops it will make up for what I lost in the other ones. I am glad I have never really gotten into trading and trying to play the market. I am more of a long term hodl kind of guy.
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In 2018 that's how I screwed myself big time (doing the opposite of you)- but holding mostly risky coins and sprinkles of solid ones. I've been spending the last 2 years trying to reverse that!
I hope you are able to get it right this time! I hope we all are!
The same holds true for the stock market. I bought stock in my company on payroll deduction. I retired in 2005. It has been sitting in my bank ever since, never touched it. By now it is worth 15 times what I paid for. At one time I thought I'd sell to cover some debts, but fortunately was not in position at that time (I was on vacation in the boonies and had no access). Still holding. My kids will be inheriting it, since now I don't need it. Of course this does not compare to bitcoin - those fluctuations don't happen on the stock market, except on maybe penny stocks, and then Bre-X happens and the scam shit hits the fan!
Many years ago I played on a virtual playground testing how I would do trading (and taking the "advice" from "experts") and found I would have lost my shirt if it were real.