Why BTC is up +4% and why nothing recently matters [SERIOUS]
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With this post I want to give you a simplified & summarized insight why BTC is up +4% today but also why in general recent price action doesn't matter. Introduction ETF filing, ETF delaying, Ethereum ETF Leak, Blackrock leak… so much nonsense that doesn't matter.Any smart money knows eventually it will come. So pricing it in, adding it to their equation & as factor for risk management and returns. Anything else in between is sharks eating small fishes thinking they can trade these annoucenements or illiquid driven price action. let me give you an example :the "ETH ETF leak rumors" Larger Crypto Twitter accounts were spreading misinformation about a possible "leaked ETH ETF" all because BTC was up for "no reason".Reality is, markets have become incredible illiquid and small demand can push up prices heavily after a long sideway move because of stacked shorts around the current price. In the chart above you can see how the Open Interest fell sharply ( arrows 3rd graph ) because of shorts covering / getting rekt on the spot demand ( SPOT CVD ). Pushed out of range, shorts closed and caused a spike fueling further shorts covering. Profit was taken suppressing eventually the rise. Shorts were deployed but the sideway movement rekt them and more and more FOMO long chasers joined. Then a few hours later, the Spot supply is hitting the market completely taking out equal amount of open interest and the price is back at the exact level it was before. Today +5% BTC Pumpas many have probably noticed, BTC was partly up +5% from the low range yesterday. And again, rumors are spreading. LEAKED ETF APPROVAL? ETF FILING? Taking another look at the chart it's very easy to understand that this is mostly, again, shorts covering that got hunted by Spot demand. Simplified here's all the information you'll need: White arrows = price action following the Data Yellow arrows = open interest plunge due shorts covering / getting liquidated Green arrows = strong Spot bidding causing price to jump fueled by shorts covering yellow arrow ( bottom ) = negative funding rate suggesting a large participants in the market are short. BTC was heavily shorted before both pumps. Red arrow = decreasing Spot demand and supply hitting the market -> slow drift downwards since squeeze But… Why?Honestly it's very simply : Supply and Demand. We are in an illiquid market where every liquidity is getting hunted by skilled traders, market makers and sharks eat the small fishes that join this mess trying to profit. Reality is, if you are inexperienced, try to time the market based on "news" currently and especially on high leverage, you are gambling on worse than 50:50 odds. Everyone was incredible bearish, many participated the market with shorts over the last days shorting Bitcoin at 25,2k. This is a dream for accumulating Bulls to squeeze some liquidity into their pockets. Psychology reasons : Crypto Space is hungry Many have joined this space during the volatile time. I think it's clear to everyone that this volatile risky crypto asset is just not like it used to be. We've now been trading in a +30% -20% range for half a year. Even the S&P 500 has more volatile days than Bitcoin right now. Open interest, Volume, Coinbase Quarter Report & Exchange Data suggest a heavy decline in interest in this space. And what is the result? A drama hungry driven market sector of all participants being literally bored looking for action. So any small news and rumors are nowadays praised as the biggest news of the year and discussed everywhere although it's been widely known and barely matters. However, this small attention is enough to move the prices nowadays due illiquidity therefore people get their confirmation it "matters because the chart moved". This is where the psychology traps them into participating in the toxic Player vs Player environment. Conclusion:Before everyone writes the same boring "that's why I DCA and don't care" comments not reading the post, I want to suggest to those that did to use this boring time to improve yourself. You can practise some touching grass and not care about crypto at all and use your extra time in your real life. But you can also decide for yourself to use this time and slow market to educate yourself about the financial world and what actually drives crypto. What asset you want to accumulate, when you expect to take profit and how to execute your investment strategies better. At the end of the day BTC will always win in the long run against the Dollar. Nothing of this short term price action matters fundamentally. But you can learn from it to improve yourself for the journey over the next decade of BTC hitting new highs to maximize your returns and satisfaction joining this space Hope you enjoy the read submitted by /u/TarkovRedditor |
