There is already speculation and news coming out about plans of a large drop, and I imagine if this occurs there will be much hysteria and conspiracy about it.
Bitcoin is massively dominated by leverage trading. In fact, the majority of buys (or sells respectively) are leveraged.
Even Microstrategy for example, is leveraging its BTC to buy more BTC - and what happens when the value of the asset drops too low when leveraging is used? Well, we will find out. But normally this means bankruptcy / liquidation.
In futures trading, this is liquidation or stop losses being hit on those positions.
Since the price of BTC has been moving up, sideways, up, sideways, up, sideways - we could see for years the intentionality in this chart.
The market has been accumulating long positions / leveraged buys, holding the price up and continuing to attract money into the market cap (leveraged) and keep the orders in tact.
As a consequence, this leaves behind a trail, like a series of dominos, of leveraged sell orders.
These sell orders are in the form of long stop losses or liquidations. In essence, we have an explosive chain reaction ready to set off in the chart - an automatic, natural consequence to how the chart has been moving the last 2 years.
The argument may be that Bitcoins market cap is stabilized by a “floor”, possibly by ETF holdings, spot holdings, ETC - however, this is not the case. Many of these spot holdings themselves are leveraged with BTC to procure more BTC.
Even so, the vast majority of the market cap is market maker liquidity allowing retail traders to leverage trade the asset and other cryptocurrency - and the exchanges aren’t legislated to disclose where the stop losses are located or how much liquidity is contained here.
So if we think popular heat map and liquidation platforms are accurate, think again. The only way to really understand this, is to look at the price movement on HTF.
There are longs held since 12,000, and stop losses respectively held sub 10,000.
I suspect the true “floor price” of BTC is between 7,000 to 8,000 - that’s the total percentage of stable spot holding liquidity vs leveraged liquidity. Leveraged liquidity has no incentive to be stable, it moves in and out, market makers make their money via bankrupting / liquidating traders, or forcing them into stopped out positions.
For me, the last 1-2 years, this has never been an IF, but a WHEN. And WHEN this chain reaction occurs, those reading this can understand the reason is not a black swan (although that may serve as some initial excuse) - but rather a very natural phenomenon in a unique market that we mistakingly treat as a stable market that these events simple cannot happen in.
I’ll be very clear when I say - it’s possible BTC drops to 8,000, extremely fast, possibly in a matter of days or even hours, and quickly returns to ATH positions.
The real warning here I want to get across, is that a flash crash as I am describing, will only go so low as the stop loss orders are active. Ultimately there are no incentives or plans to destroy or bring BTC to zero.
When this flush happens, the big players (market makers) will be filling in the buy orders at those low prices with the liquidity returned from retail longs.
DO NOT SELL AT A MASSIVE LOSS. This is the biggest warning I have to get across with these posts, and would be the most devastating conclusion - believing BTC will go to nothing.
DXY is breaking down a major multi month bearish pattern and over the next 3-5 year period will be absorbing liquidity towards the lows. A falling dollar = bull market for BTC and equities.
This move up on BTC WAS NEVER A BULL MARKET - it was a bearish retest. This explains the erratic, up only nature of the move zoomed out - and all these justifications to explain that this is the “norm” it’s dangerous to traders. It’s not the norm of a bull market, it’s the norm of a bearish retest.
What do you do with this information?
If you are me, and by no means am I suggesting this, you can short the market and try to align yourselves with the big players.
If you’re a believer in the future of BTC, you can do nothing - not letting any fast drop or hysteria shake you or drive you to making an emotional decision to sell or change your mind.
This has never been a doom and gloom scenario for you all - it’s a reality check, a warning, and an opportunity to prepare yourselves for something you may not yet believe is possible unless you’ve been watching this market unfold since it’s very inception. In those cases, you will certainly remember flash crashes and stop hunts - and they have never changed, nor has the nature of the exchanges or market - it’s month more calculated now with big players invested in capitalizing to the fullest on the flaws of it all.
I wish you all the best.
Bitcoin is massively dominated by leverage trading. In fact, the majority of buys (or sells respectively) are leveraged.
Even Microstrategy for example, is leveraging its BTC to buy more BTC - and what happens when the value of the asset drops too low when leveraging is used? Well, we will find out. But normally this means bankruptcy / liquidation.
In futures trading, this is liquidation or stop losses being hit on those positions.
Since the price of BTC has been moving up, sideways, up, sideways, up, sideways - we could see for years the intentionality in this chart.
The market has been accumulating long positions / leveraged buys, holding the price up and continuing to attract money into the market cap (leveraged) and keep the orders in tact.
As a consequence, this leaves behind a trail, like a series of dominos, of leveraged sell orders.
These sell orders are in the form of long stop losses or liquidations. In essence, we have an explosive chain reaction ready to set off in the chart - an automatic, natural consequence to how the chart has been moving the last 2 years.
The argument may be that Bitcoins market cap is stabilized by a “floor”, possibly by ETF holdings, spot holdings, ETC - however, this is not the case. Many of these spot holdings themselves are leveraged with BTC to procure more BTC.
Even so, the vast majority of the market cap is market maker liquidity allowing retail traders to leverage trade the asset and other cryptocurrency - and the exchanges aren’t legislated to disclose where the stop losses are located or how much liquidity is contained here.
So if we think popular heat map and liquidation platforms are accurate, think again. The only way to really understand this, is to look at the price movement on HTF.
There are longs held since 12,000, and stop losses respectively held sub 10,000.
I suspect the true “floor price” of BTC is between 7,000 to 8,000 - that’s the total percentage of stable spot holding liquidity vs leveraged liquidity. Leveraged liquidity has no incentive to be stable, it moves in and out, market makers make their money via bankrupting / liquidating traders, or forcing them into stopped out positions.
For me, the last 1-2 years, this has never been an IF, but a WHEN. And WHEN this chain reaction occurs, those reading this can understand the reason is not a black swan (although that may serve as some initial excuse) - but rather a very natural phenomenon in a unique market that we mistakingly treat as a stable market that these events simple cannot happen in.
I’ll be very clear when I say - it’s possible BTC drops to 8,000, extremely fast, possibly in a matter of days or even hours, and quickly returns to ATH positions.
The real warning here I want to get across, is that a flash crash as I am describing, will only go so low as the stop loss orders are active. Ultimately there are no incentives or plans to destroy or bring BTC to zero.
When this flush happens, the big players (market makers) will be filling in the buy orders at those low prices with the liquidity returned from retail longs.
DO NOT SELL AT A MASSIVE LOSS. This is the biggest warning I have to get across with these posts, and would be the most devastating conclusion - believing BTC will go to nothing.
DXY is breaking down a major multi month bearish pattern and over the next 3-5 year period will be absorbing liquidity towards the lows. A falling dollar = bull market for BTC and equities.
This move up on BTC WAS NEVER A BULL MARKET - it was a bearish retest. This explains the erratic, up only nature of the move zoomed out - and all these justifications to explain that this is the “norm” it’s dangerous to traders. It’s not the norm of a bull market, it’s the norm of a bearish retest.
What do you do with this information?
If you are me, and by no means am I suggesting this, you can short the market and try to align yourselves with the big players.
If you’re a believer in the future of BTC, you can do nothing - not letting any fast drop or hysteria shake you or drive you to making an emotional decision to sell or change your mind.
This has never been a doom and gloom scenario for you all - it’s a reality check, a warning, and an opportunity to prepare yourselves for something you may not yet believe is possible unless you’ve been watching this market unfold since it’s very inception. In those cases, you will certainly remember flash crashes and stop hunts - and they have never changed, nor has the nature of the exchanges or market - it’s month more calculated now with big players invested in capitalizing to the fullest on the flaws of it all.
I wish you all the best.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.