Seems like a lot of people are suffering from this MAX difficulty market. I will share some opinions and speculations on why this market is so hard.
First off, what's a difficult market? Inconsistent, volatile, yet low volume. Sudden wicks upwards or downwards which seems like a breakthrough from stagnation, but all of them are fake. That is the situation of the market at the moment.
This type of market is known to be devastating for intermediate retail traders. Even the more knowledged, experienced and serious traders lose. Eventually they will learn how to overcome these markets, but I can help you accelerate that process.
So what's the reason behind this untradeable market? Multiple factors combined. However nothing new. These factors being:
1. Inflation / Interest rates are not getting lower. The market has consistently been optimistic on a better economy but the global politics, such as war, US debt, etc. are really not helping.
2. There are too many institutional holders, who hold too much and won't do anything. This mostly applies to BTC.
The ETF approval has created significant participation of big players, but has adverse side effects.
Everyone is holding, no intention to sell or buy. Or BTC locked in ETF does not circulate efficiently around the traditional major crypto exchanges.
This essentially creates a "stalemate". No one wants to sell, but no one wants to buy either.
One thing that many people are mistaken of is the supply / demand system of Bitcoin. Bitcoin's supply is hard capped. Yes. More and more people, or institutions will hold BTC in cold wallets. In self custody, which puts them out of circulation.
But there is no supply shock, simple reason. Demand for Bitcoin is not what you think. It is not a comsumed commodity. It is not a natural resource. There is no essential demand that must be met with equal supply, such as food or oil.
The only demand Bitcoin creates, is the opportunity to speculate for potentially huge profits. Such type of demand is not guaranteed. Therefore, no supply shock.
