Happy Mother's Day to those who are, or have Mothers... hey that means everybody!
So, last night SNL featured guest Elon Musk.
The Doge community was wild with excitement and anticipation. I offered caution that the adage is "buy the rumor, sell the news".
The rumor? Doge to $1!!!
Some may remember last year when it was "Doge to $10!" At the time, it would have taken around $13 Trillion to accomplish this goal, but who cares about reason, right?
This time, millions of newbies were involved, Crypto Twitter was constantly trending Doge hashtags and there is no better example of everything the crypto world is begging for; mass adoption, media attention, billionaire support, all on a coin with low value that people can buy hundreds, thousands, tens of thousands of. Crypto millionaire, yeah?
Last year, that $10 Doge made it to something around $0.00006 from $0.00002, and forgive me if my units are off by a zero or two, because honestly I don't care. A different pump finally brought it to a penny, a couple of pennies, and I saw that each shill meant someone was having an incredibly easy time shilling the same unexpected pump over and over again.
I'm certainly not saying that Doge can't reach $1 or even $10, but it isn't going to happen in a single shill pump. There simply isn't that much money in the free market of crypto yet.
Even with top ranking coins, I've noticed that whenever there is a major barrier to be broken, be it a short term peak or an all time high, the whales who either instigate the pump and shill, or follow the groups who gang together to pump, always dump before the goal target. They want to be certain that the liquidity to sell all of their temporary assets are available. I would guess it most logical to be timed to pump groups because they are so numerous on Discord and Telegram and they announce a time, but also these are going mainstream until they force the hand of the SEC to step in on yet another freedom in crypto of which we do not wish them involved.
Buying the rumor means that for days on end, people believe that at "x" goal time, everyone will pump that coin to "X" amount. The problem is this: All of the buying is taking place on the days leading up to the goal. Then, everyone pauses to watch and see what happens because they are new, they are loyal, and they believe the shill news. Every. Single. Time.
Yesterday, it was fun to see dozens of crypto expert youtube channels hosting a party to watch SNL, show their reactions and post the Doge price, with the expectation of sharing in the joy of seeing it climb to $1 and probably beyond. Doge is currently at $0.48. During their broadcast it was down to $0.55.
Buy the rumor.
SELL the dip.
What's more, these channels had chats going absolutely insane and people were spending as much as $300 on super chats. I don't get it, but that's $300 in Doge they do not own. Just sayin'.
The whales and leaders of the pumps have already been buying their coins in the days, weeks, months, and long HODLs likely in the years, and they have set sell orders everywhere they believe the pump will accumulate. It doesn't matter if they already have sells in limit orders on the order book where anyone could go and view them for 2 reasons, but in addition when the heat is on, if the target isn't already reached, they will wait until a coordinated time to dump on the market. This will be when volume has started to drop but the price has not lost the wind under wings quite yet.
Two reasons it doesn't matter if the sells are already sitting on the books:
1) newbies don't understand the economics of the pump, so they don't know to look for clues of that nature.
2) Robinhood doesn't give you that information intentionally, and neither does Voyager App, and neither do ANY of the hip kewl hipster Gen Z Crypto Apps targeting the young, clueless audience. They give you brokered swap gaps of 1-7% for market buys, or limit order capability without any depth or order book visualization.
Now, I'm not completely charging any apps or platforms with this responsibility. You can load up literal hundreds of exchange views for free if you are on the device that is the world wide internets of webitude. But again, who is training the newbies to know what to look for?
In the case of Doge, the goal may truly have been to get Doge to $1. Ask Mark Cuban. Ask Elon Musk. They won't tell you. But, even more, the goal is to take profit and buy the dip.
Buying the dip
If there is one thing to understand in the crypto market, it is that for better or worse everything, every single thing is price manipulation. It is the reason I am here, and it is the way you need to start thinking about crypto. Whether you are a die hard idealist or a casual trader or determined daily trader, you need to understand the economic dynamics of liquidity and why leaning loyalty to the long HODL solely is not the only thing that makes sense. In my next article I am going to do an extremely simple comparison of a Saylor-like corporate strategy versus the personal goal-driven HODLer and attempt to show you why you should be learning some of the technicals of the market to earn more and earn quicker. This can be done casually and with little risk in the right assets. Remember, if you happen to guess wrong on a dip, you were planning to HODL the thing anyway!
If I were Elon, let me pretend I had $10 Million in Doge (I know, ridiculous but who knows what he owns... probably much much more). I got it at an average price of $0.02 per Doge (or as idiots reporting trends on Crypto Twitter say, $0.02 per share of Doge lololol). He regularly, calculatedly offers cute little tweets and gestures and nuances towards a price hiccup here and there, and people pile in with excitement. SNL comes along and the rumor pumps to somewhere around $0.72. Doge has been elected because in marketing it sells itself with a cute wink and lends itself perfectly to today's meme culture and it is fun, and as long as it isn't your retirement funds I have no problem with people putting their fun gambling money into it. At the first SNL break in my opinion, but whatever... I would dump my stack and wait for the fallout. No matter what they say online, everybody for the most part, except perhaps die-hards and newbies, dumps when there is a panic sell. FOMO on the way up, FUD on the way down. Even more, the reverse is true.
If you measure your wealth in the Doge, then you have lets say 80% more Doge if you sell at $0.72 and buy at the dip around $0.44. If your goal is more Doge, that is the best way to do it. You made your investment, now grow it! Hey listen, if you're trading USD(t) to Doge, you aren't showing your support to the evil wicked fiat when you sell your precious doggy treats (just having fun). You are creating a mechanism by which you can accumulate more. But, this is for the next blog topic!
So, folks, I believe in trading solid assets, I do. I am not looking for a 1000% pump. I know it is exciting and I have piled on with the rest of 'em in my time. But, my goal is to accumulate wealth by doing something operable and repeatable. I love following the fun, community and culture of crypto, but I often desperately wish for people to understand things that from a few years in, I can clearly see they are not going to grasp. But ah, you, the Gordon reading community, YOU can learn better and apply knowledge to strategies that work.
Be resilient, crypto army! I hafta say, if you are in it for the long haul, the only things we have to fear are man-made blockages to the market. Those who say "you can't stop" their favorite coin, they simply do not understand the power that governments and agencies have, and they are possibly the worst whales of them all. I would love to know how many members of the SEC bought the dip on XRP when they sued them from outta left field. Why not? Who's going to provide the oversight to catch them in their own insider trading? Their rules, not mine.
Whales are whales for a reason. Many of them may have started only risking hundreds of thousands in crypto, but their hands are huge because they are doing effective things that work. They may all have different strategies. I can see their fin-prints on certain specific types of market moves, but truly until you and me are the future whales, we won't know for certain exactly what comes next. But, one thing for sure, buy the rumor, sell the news. Do not get stuck holding your $0.72 Doge thinking it is going to $1, when the peak was clearly at $0.72. If you are in it for the long term, then all of this was just entertainment anyway. Long HODL who knows, Doge becomes the standard currency and every country abandons their CBDC plans.
And on that note, a cautiously, calculated crypto Gordon Freeman, super-duper hero of coin and might... out.