With the reality that there is no SegWit 2X fork happening, it's timely to review how we got to this astronomical price point over the past month. One month ago (October 8) the price was $4500. Today, (November 8) the price is sitting around $7500. Wow, look at that, phenomenal growth.
Around a month ago, the Altcoin Traders began anticipating this upcoming SegWit 2X fork, and in order to get some of that extra magic 2X (free bitcoin , right?) they started consolidating and settling their gains into Bitcoin early. What happened is all that capital rushing from other cryptos into Bitcoin caused the Bitcoin price to pop, and catch headlines. Before you know it, another wave of brand new traders was flooding the market, Bitcoin is all over newspapers and television across the world, and the hype is unbelievable. Headlines read Bitcoin headed to $10K, $100K, $1MM, $1B, I've seen it all. My friends and family start asking me how to get in to the market. The buzz of Bitcoin is in the air. Then Bitcoin Product (still unconfirmed) breaks headlines, and zoom we add jet fuel to the hype engine, again rallying to all time highs, before even touching the sea floor after the last rally.
Now the thing that strikes me about this new wave of "institutional money", which to some people somehow legitimizes Bitcoin , is that it means there are more traders coming in with bigger amounts of money. These whales are much more sophisticated traders than we have traditionally seen in cryptocurrency, and they are accountable to quarterly profits, measured in fiat. Where are they getting all this new fiat from in their 4th quarter earnings? New Bitcoin traders dumping their saving accounts into Bitcoin , from all over the world.
The last few weeks you can see these new whales playing in the pool, even in the media hype (Goldman Sachs), and wow look at them have fun. These are masters of the markets who have gained their prowess making profits off markets much less volatile than Bitcoin . Now that these whales have come to play in the Bitcoin Pool, it's too easy to play the market and extract massive profits from newbie traders who are riding high on the hype engine. Their massive trades sway the market in a matter of seconds, and exponentiate the gain and loss of billions from the market cap with single trades. $3 million dollar trades move the market cap by hundreds of millions of dollars, and these massive liquidity pools in the space stabilize the price at the levels of this newly touched demand for Coinbase traders to snap up. Pods of whales are just pumping those new trader's money into their accounts, as it circulates through the Bitcoin ecosystem. Fourth quarter is looking good!
Now we have no SegWit 2X happening (great news), and yet here we are! So high up in the sky, and with some VERY high stop losses set, which makes for a very fragile plateau... very fragile.
My guess is that before heading to the moon, we'll have to come back to earth to refuel. #happytrading