Flash-Crashes Happen in the Bull Market...
... and they are often a way to clean out leveraged long positions.
Whales don't need to leverage trade, and if they do, they do it as a hedge, not to inflate their potential short-term gains. Crypto isn't a large enough market for whales to play leverage games, even if they wanted. And I still wouldn't see any serious whale use leverage other than for hedging purposes. Because they understand the value of their wealth, and they are not going to gamble it away in leverage trading.
I also believe whales are not very fond of leverage traders (not hedgers!) because they try to burn stages to a rather rarified atmosphere.
And every once in a while, they help them slip from the cliffs. Those without a parachute that opens in time... well, don't make it, financially speaking.
I don't know if what happened today is a shakeout of the leveraged long traders or if it has something to do with the imminent decision of the SEC regarding the bitcoin spot ETFs.
Like out of the blue, "a report" came out that says all ETFs will be rejected. I sort of doubt that... It's what I would use as a whale to start the FUD to help me clean out the leverage traders. But maybe it's true. You never know with the SEC.
It could also be directed toward weak hands. A flash crash plus the associated FUD to convince them to sell because the up movement is over, only to discover it may be only the beginning (or the middle), once (if) the ETFs are approved.
I tend to agree with @edicted here, for those applying the "buy the rumor sell the news" theory. The news won't be the approval of these ETFs, the news will be when they'll start to operate. And that's still quite a while away. The approval of the ETFs will be the confirmation of the rumor, the trigger that may start the madness. A serious selloff is still not in sight, in my opinion. But I might be wrong. So, think with your mind and make decisions based on your judgment.
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Yeah, I agree with you. I see some guys on X/Twitter asking people to hodl and don't panic and be shaken out. The crypto rollercoaster will go up soon! Hehe!
Hmm, those aren't encouraging signs. I don't trust Crypto Twitter, lol.
Hahahaha Crypto Twitter is interesting and fun to read!
Matrixport, the ones behind the FUD creating news stated a few days ago, if I remember correctly, that the ETFs will most certainly be approved by January 10... The current price action is nothing more but a move necessary after all the rallies we had lately. It's amazing to see $100 billion daily moves for the total market cap, while just four years ago the total market cap was something like a bit over $100 billion.
I lost a few dollars on leverage trading today and that made me close all my positions and stick to spot positions(self custody). Leverage is like cocaine and I've had enough of it.
Edit: here's what I was saying about Matrixport https://twitter.com/BTC_Archive/status/1742537243200274673
That's hilarious, I didn't know they said the opposite a few days ago! 😄
Nah, it's too swift to be a normal correction. Whoever did this wanted to catch leveraged long players off-guard and without enough collateral to cover their positions.
Yep, it can be addictive. I won over 100% in 5 minutes once on leverage. And lost it on the following two trades. Of course, you can use a much lower leverage, which is not as addictive or risky, but I prefer to stay out of it completely.
That is to show us how volatile bitcoin can really be
Oh, this is nothing. The times have changed and bitcoin is no longer as volatile as it used to be. I remember +25% days and -15% days for bitcoin.
It has been the story the last 18months, both longs and shorts getting wiped out regularly. I cannot see how the leveraged game can work over the long or short term!
It probably can, if you can control the outcome or if have strict rules regarding the ratio between investment and collateral compared to the leverage applied. But it's a very risky game, the way most people play it. Or a very safe game, the way hedge or pension funds play it.
Brace yourself, the rollercoaster is one long ride.
So, you think it's going down from here? Or that we'll keep having pretty sizeable ups and downs from now on (high volatility).
not exactly. the up and down actually create good trading opportunity.
That's true.
It wasn't expected at all, but it crypto and it's unpredictable.
If everything was predictable, it would be boring. :)
I think the price will stay within the 50k level until the support ETF is approved.
That's very likely. Only a few days until we know one way or another.
I was surprised by that dip this morning
It was a very crazy one!
The bull market is full of surprises and traps.
I think the flash crash also served as a good dose of reality to not be overly carried away by the hype of the upcoming bitcoin spot ETFs approval.
Maybe. The day before the market tried to break the 45k in anticipation.
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I definitely would not trust the rumors so much but I guess anyone who bite the hype suffered. I do think the ETF will be passed eventually.
The bleed was really massive and all the Crypto space feel it
I would like to think this is just profit taking in preparation for the uncertainty of the decision, or how the price will move after the decision. For the believers, this is just a discount and they will gladly buy it up. It will be interesting to see how it develops as we get closer to the decision.