Over the past month, Bitcoin fell from levels above 66K to below 55K, was below 60K for more than 10 days, has now returned above 62K and is storming 63K.
It would seem - what is unusual here?
Fluctuations within 10-12% per month are no longer the volatility that was several years ago. Everything is somehow calm and predictable.
However, there were under a yard of liquidations in the market (and now there will be even more when moving up). The fear index fell to the levels of the end of 2022, when one of the largest crypto exchanges collapsed and some reasons for fears about the future of the market were much stronger than now.
Let's look at why this happens using an example. Let's get rid of the market and Bitcoin.
We have coin X, which has been moving between 7 and 10 for several months. Everyone understands its prospects, they are waiting for X to break through 10 and fly above 15.
But then rumors appear that people who have X amount are going to sell the coin. There are no special reasons, just large volumes of X are transferred between wallets, and everywhere they write that X will soon collapse.
As a result, X does not go above 10, but below 7. It falls to 5.5 and hangs there.
At this time, those who bought X between 7 and 10 sell it at a minus. Because everywhere they say that X will now fall to 3.
X hangs around between 5 and 5.5 for a couple of weeks, no one really buys it - it’s scary. But many are selling. Without thinking about why there are a lot of sales, but the price does not fall. Who then buys this X?
One day X returns above 7.
Everyone is starting to say that this is a scam. Soon X will fall again, and even lower than before. We need to sell it quickly, taking advantage of the opportunity. Better yet, open the shorts with the shoulder.
And indeed, X seems to be growing, but slowly and uncertainly. The cries of a “buyer trap” are getting louder. More and more people want to open shorts. Those who have sold X below 7 shout especially loudly. It is important for them that it falls, because otherwise they feel like deer).
There is no rush to buy X yet. Because it’s difficult for people to answer the question - “why would I buy X for 7.5 if it cost 5.5 a couple of days ago?
X dangles like this for several days, then continues to grow. It's already 8.5.
Liquidation of shorts begins. They still shout about being trapped and falling, but less so. But they are still afraid to buy - after all, X has already grown so much, now it can only fall. The ideas “we need confirmation of the trend” appear. Let it strike 10, then we’ll buy it.
The question “why didn’t I buy X at 5.5” is more difficult to answer. And the question is added: “why didn’t I buy it at 7.5”??
X has been hanging out at new levels for several days. Then he makes a leap above 10.
Almost all shorts have been eliminated. Those who lost on shorts open longs with leverage (losses must be recaptured). Now everyone wants to buy X - after all, there was a “confirmation of the trend”, it consolidated above 10.
This goes on for several days. After which suddenly news appears again about the imminent mass sale of X, and it falls to 7 again.
There are tears, snot, and disappointments in the market. Longs with leverage have been liquidated. Those who bought X above 10 no longer believe in anything and sell it with curses. But after a couple of days it again soars above 10. This time without return.
Everyone wants to buy X again. But most no longer have money.
This example contains the whole essence of the market.
In order to take money out of the market, and not constantly bring it into it, you need to do not the same as the characters described here, but vice versa.
Just.
Whoever masters this skill will always have money in any market.
ATTENTION!
Coin X is given as an example, no need to look for it and buy it)! The name of the coin is not important here at all, the described scheme works for everything.
