I usually work by leaving one of my video monitors exclusively on the Broadcast showing the main ups and downs of the market and I confess that, lately, some movements have been calling me (huge) attention.
We know that one of the main characteristics of variable income, with the forgiveness of redundancy, is that it varies. But still, highs and lows of 30%, 40%, 50% or more in a single day are not the norm in the market - quite the contrary.
As a rule, such a moment of brilliance occurs in the most illiquid CRYPTO (that is, those that negotiate very little).
Likewise, this is true of gold in the wild: when a mine is discovered, it is usually located in isolated areas, with little or no population presence.
Although I always get that feeling of “how come I haven't seen this before?”, When this kind of variation happens, I run to try to find out what's going on with that crypto. After all, some subscriber to the series can ask me.
After a quick analysis, most of the time, I conclude that the movements are purely speculative.
This is when they do not hide illegal practices, such as the use of insider information and the famous pump and dump, which is when some smart guy makes positive (but false) statements about a certain crypto, in order to sell their coins at a much higher price to the unsuspecting.
As the historic gold races have shown us, many people end up buying these highs on the exchange believing they are doing the business of their lives. Just remember that the cities of Ouro Preto (MG), San Francisco (United States), Melbourne (Australia) and Johannesburg (South Africa) emerged from the search for rapid wealth and keep many stories of the failure of its former inhabitants.
And, although quite valuable, gold is scarce. In the search for precious metal, many end up encountering the so-called “fools gold”, which is actually a sulfur mineral called pyrite.
The appearance of pyrite, such as color and shine, is very reminiscent of gold and can even fool beginners in mining or even the most desperate people, but it contains extremely damaging aspects - for example, when heated, it exhales sulfuric dioxide, a poisonous gas .
On the Crypto Exchange, the two biggest increases in 2021 are for Crypto situations that can be considered delicate (a euphemism not to say that they are not a good one). In both cases, despite increases of more than 100% in a few trading sessions, these cryptos assets have what we call an overdraft liability in accounting.
In one case, without mentioning the name here, the crypto headquarters looks more like a ghost building, so, my warning today, for you who are looking for easy money on the crypto exchange, is that one hour you might end up with this fool's gold. I dedicate long hours of my day analyzing crypto and looking for attractive opportunities, but that, even so, would hardly be valued in such intensity, as our two “champions”.
Remember that the market is made up of many investors, professionals and amateurs, some of whom are the envy of the greatest nerd of the class in their school days: do you really think something so good would go unnoticed in the eyes of the majority?
I would hardly say ...
In short: watch out! Just as not everything that glitters is gold, not everything that is valued too much is profit. Go beyond the highs and lows, try to understand the reasons for the fluctuations and the company's history.