Sirwin
Sirwin

No Bull-Run When Everyone Expects It

By idiosyncratic | Idiosyncratic Crypto | 12 Jun 2023


The markets are slightly different from gambling houses, in both cases, houses always win. However, it does not necessarily mean that you will always win, too. In a market, there are basically 2 parties, buyers and sellers. When you sell something at a loss, you lose money while the buyer makes money with the asset s/he bought from you.

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The crypto market is not different from the stock market regarding these principles. There should be some people who lose money so that some small groups of people can make gains. Basically, if there is nobody to lose money somewhere in the world, I cannot make money, either.

The only time this principle slightly works is when airdrop (money printing in central banks terms) happens. A brand new coin is created out of thin air and people start trading it by attributing a new value. Except for that case, markets need people's money that is lost in the wrong positions.

If everyone is turning bullish, will the crypto market pump?

News Over Sentiment

There are some effective factors that change the sentiment in the market. The war, inflation, the interest rates by the central banks, and recently, the crisis of the debt ceiling.

Today the debt crisis has been solved but the markets did not skyrocket as expected.

  • Debt ceiling to be raised for 2 years, by around $4 trillion.
  • $50 billion in spending cuts, no new taxes, and halt to plan to increase IRS funding by $10 billion.
  • Increase in military spending
  • No budget caps after 2025

by Spectatorindex

Obviously, all the tension was in vain. The markets overreacted to the case and the prices dropped sharply. However, when the problem is fixed, we are still below the former prices before that case.

Another factor that affects the market is the possibility of a 25-base-point increase by the FED. Though it does not make a lot of difference, this is a weapon to control the markets.

The news always affects the markets and if you are not a speculator, rather than an investor, you can only watch the situation and take a position if the cryptocurrency or the price of an asset is above or below support and resistance levels. The situation only enables news traders to make gains but, as you know, the risk in news trading is a lot higher than normal traders.

Control Over Markets

The control over the market does not have to be a sharp drop or a rocket case in the markets. Holding a market in a vertical channel with low volume and uncertainty, the market makers both accumulate more cheap assets, and they play with the emotional psychology of investors. There is always an immense battle between the market makers and the retail investors when the market is either at all-time low levels or moving sideways.

Meanwhile,crypto investors lose money against inflation, too. In a market that moves sideways, you do not make permanent gains or losses but the USD equivalent of that cryptocurrency loses its value each month. To give an example, let's take Bitcoin's price as a basis.

When BTC is around $26-27K and you are holding, for 6 months, you actually lose 2,5% of your purchasing power meanwhile due to the inflation in USD.

Market makers never let the dream of investors happen. We all want to multiply our gains in crypto and buy "cheap" assets with that money and invest the rest in other markets and double/triple the money again. This is, unfortunately, too hard for 99% of people who put their money into markets to achieve while the markets and media are under the control of a minatory group.

The fuel of the market is both fear and greed like a hybrid system. The greed in the bearish sentiment (war, inflation, banking crisis, etc) may end up with a long-waiting situation or another test to all-time-low levels.

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idiosyncratic
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