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Hey everyone, I've been seeing a disturbing trend lately and thought i would get everyone's opinion on the matter. *Disclaimer: I do invest in crypto-currency and do play the market. I both day trade and HODL so take what I say with a grain of salt. I am not a financial advisor. This is all observation and opinion.
I've been in the crypto-currency market for a little while now. I started watching the market since last January back when Bitcoin was about 1000 USD and everyone assumed bitcoin was only for drugs. I finally invested in March and just started really getting involved these last couple of months. I have been doing research on popular coins by looking in to price trackers, reading up on charts and behaviors, watching order books, getting data points from API's, even watching individual orders. Now I have made money but nothing spectacular, I still have my day job.
My background is in math/game theory research and my side job is in IT. I "try" to invest only in coins backed by promising technology but don't mind getting on the hype train every now and then. Tracking all these numbers and plotting data points looking for the rights signals is almost impossible, but at least for me its pretty fun. Just being able to do some math on the side outside of my own research and work is very fun, and in this area can be very rewarding. But lately I have been seeing some trends become more and more common place but what they imply, and will eventually lead to, frighten me.
As the year has gone by I have gotten more and more detailed in how I look at the market behavior, and though I can't say I can see where all the dips and jumps are going to be (I cant), I can say I there is specific behavior and it's glaringly obvious. It's always obvious when a whale shows up.
The behaviors are easy to spot, pay walls, buy walls, and massive transactions. Each of these negatively affect the market. By either keeping the price down so they can buy more before the price goes up or by inflating the price for the "pump and dump" scam. Now most of us have lived with these whales as a necessary evil and even using them to make some money since eventually they will let the market correct itself. But lately I have been seeing new trends that are far worse, and in my opinion, will destroy the entire crypto-currency market. That trend is by killing natural price fluctuations.
This trend was most apparent yesterday(JAN 8) with one coin, XVG. A week ago with just a false update that the wraith protocol released XVG spiked almost 100%. Shortly after, about half a day, the market started to correct itself since it was all bull. So I was surprised yesterday to see XVG had a huge increase of about 25% in an hour. I did a little research and found that Wraith had actually released. Well that's great I thought, maybe I should invest in XVG again. Now that they've shown they can deliver, albeit late, it may still be early enough to make some profit of this boost. But as I looked at the timeline chart I saw the jump was only that first hour. In fact after the price stopped rising it started almost immediately overall decreasing. Then over the 12 hours it has been fluctuating between ~7%.
Many other coins in the top 20 have been fluctuating like this as well and at least I just chalked this up to periodic stagnation. Sometimes the market is just calm or red for a few days. But why would XVG being doing this? It just had major news. It should be all over the place, rising and falling continuously making corrections at least for a few hours. But in less then 2 hours, its already behaving like every other popular altcoin in the market. Minor fluctuations of ~7%, and some other coins are even fluctuating ~1% as of the time writing this. All of which are slowly going downward. Every uptick leading to large sells.
Looking at all my indicators it looks like sell walls and buy walls. Now this may seem like the same old whale behavior of trying to get more coins but it also means something else. A whale is controlling the price. But if someone is is stopping fluctuations and corrections of XVG, a coin that should be be all over the place rising and falling, whats stopping whales from controlling the prices of everything other coin? There isn't anything stopping them.
Every popular coin right now has evidence of pay walls, buy walls, and massive singular sells and buys at during upturns and downturns. Every popular coin has a whale controlling the price. Right now everybody is waiting. Not waiting on the coin to gain value, but waiting for the whales to let the coin have value. Someone is literally choosing when our next upturn happens.
The price of coins is no longer dependent on whether the tech behind it is useful or necessary or just a scam. It is all dependent on whether some rich whale thinks other people should make and money on that coin. Its why the other new coins all of a sudden gain massive value almost over night. It isn't because all the new users wanting to make a million or people having faith in the tech. Its just a whale baiting people buying into the (hopefully) next big thing while they bleed everyone out. Whales don't need the price to go up. They can make thousands of dollars a day even an hour baiting people to buy or sell. Then let a coin rise or fall to bait them in again.
The market being unregulated has allowed a select few control everything. As it becomes more mainstream and bigger players get involved things will only get worse. These whales will be able to siphon of all the value themselves while smaller players pick up the crumbs and hope that the whale decides to let a coin be it's true value. Right now every moon is just because someone let it happen. Hence the title. Soon there wont be a market at all, just schemes where people can get your money and never be tracked. The next massive crash may just be the last one.
This also leads to many other problems but those can be put into other posts. This is just something I wanted to get out there so more people are aware of the currents issues we as a community are facing.
Would it be possible to create a bot that lets you know when a whale is making a move? Could help you sell when a buy wall appears, and hold or buy when a sell wall appears. Seems like one of the best ways to take advantage of the whales.