BTC: Where Are We Now?

in LeoFinance2 months ago

Bitcoin is falling down, again. Right now it's at about $46,5K and again I hear talks about buying the deep, a necessary healthy correction and so on. However, I always wonder why a correction is "necessary" and why it's a "healthy" one, provided that we have a constant inflow of money, outflow of the product, and the expectation that the price will go only up over time? "Buy at dump, sell at pump" is a profitable strategy indeed -- except for the day when there will be no more pump, only more dumps.

Maybe, today is the day?

Ok, I'm joking. Probably, I simply don't understand all the mechanics behind necessary healthy corrections. In any case, I believe we're not yet done with BTC pumps. "The institutions" are said to pile another shitload of bitcoins up recently. Over 10K BTC, to be more or less exact.

For comparison, Binance's notification system treats a 3 (not 3K, simply 3) BTC order as a "large buy" (or "sell"). So, 10K BTC is a pretty large amount at Binance's standards. I always wonder how "the institutions" manage to buy such shitloads without moving the price too much. I think the "institutional" traders, the exchange owners, some "whales", etc. know the exact magic, but it's what they will never talk about in public at Cointelegraph, Leofinance, Publish0x, Twitter, Youtube, and alike.

However, I have a little conspiracy theory on that.

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Actually, my theory is a modification of the (widely known) engineered liquidity manipulation. By "engineered liquidity" I mean an artificial dump made by a big buyer in order to fill his big orders at a cheap price (the similar method works for a big seller too). You put a "sell wall" and start selling in order to cause a dump. If you're lucky and your dump scares the weak hands, attracts shorters and selling bots, hits stops, and causes liquidations -- the price starts to fall "by itself", like a snowball rolling down the hill. You then put a buy order and get a pile of shit at a cheap price. It's like shaking an apple-tree and catching falling apples with a basket. However, no matter how simple this method may look, practically it requires a good deal of knowledge, experience, and resources.

My little theory implies nearly all of the above, except the last phase. Instead of submitting a buy order in the exchange's order book, you go to the OTC and buy your pile there. Thus your buys don't drive prices at the exchanges and you have more time to stuff your bags with 10K BTC. When you're done, you can start placing buy orders like 3 BTC each, to drive prices at the exchanges back up.

I really love my theory. But I don't think the OTC sellers are idiots to sell their Precious too cheap. However, if you manage to drive the price down from $58K to $45K, you might probably expect to buy your 10K BTC at OTC somewhere in a $45-50K range.

Anyway, it's only a speculative theory. Unfortunately, I don't know the real magic. But I tend to believe that most "institutional" buyers don't go through orderbooks of crypto-exchanges. When you want to buy $1.5B of BTC, you (1) use 3 BTC orders to drive the price down, then (2) buy $1.4B of BTC elsewhere, and then (3) use $0.1B for 3 BTC orders to drive the price back up.

I think today we're somewhere in the (2) stage.

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