One week has passed since the Bitcoin spot ETF was approved.
But most did not expect today's market reaction.
What if I told you everything is all happening according to plan?
Here's what will happen đ
Most crypto traders have been divided in 2 groups on what the spot ETF would do to the market.
1ïžâŁ Up only traders
2ïžâŁ Sell the news traders
I believe the post ETF effect is divided in 4 sectors to make up a circle, and after those four sectors are complete it is a rinse and repeat to trap most traders.
And we are currently in sector 2
1ïžâŁ Small market pump
The first reaction we saw from the market after the approval was a small market pump.
The first sector to trap the "sell the news" traders.
Pump the market so these traders think they are wrong and ape back in.
Pump the market but only a small pump so the "up-only" people think they are right but not enough yet so they can benefit from it (profit taking).
Just only to convince them to hold and not sell high.
They'll be trapped in the next sector.
Sector 1 effect as intended â
2ïžâŁ Market dump
The second reaction we saw from the market after the initial pump was a dump.
Sell the news traders that bought back in and the up only traders think they are right.
But now the market is dumping after all?
The up only traders think it was a sell the news after all and start selling once bitcoin moves towards $40k to buy back lower at $30k.
The sell the news traders think the same.
They sell lower than their purchase to recoup the loss by buying at $30k again.
Sector 2 effect â
3ïžâŁ Market pumps sooner than expected.
The final flush out.
Both sides of traders are out and patiently anticipating to fully benefit and recoup all losses by buying back at $30k to ride or all up again.
Only however bitcoin doesn't dump to $BTC 30k at all.
The market dumps but only slightly to convince them enough so they can be trapped again.
Bitcoin moves sideways but never sees low 30s.
It stays trading around $40k with only the slight chance to see the upper regions of 30 (38-40k).
TBC
