’s price vacillated above and below $7,000 for a couple of months, but then dropped below $7,000 on September 5th, 2018, and didn’t reach $7,000 again, until this past Saturday, on May 11, 2019.
In the last 48 hours, ’s price reached and slightly exceeded $8,000 (May 15, 2019), but then pulled back to about $7,884 the next day (May 16, 2019).
Which brings us to today (May 17, 2019). Overnight, a “whale” (a holder of large amounts of ), sold 5,000 for $6,200, on the popular Bitstamp exchange.
Note that price. Why? Maybe that whale got his or her for next to nothing, so that figure represented a major profit.
Or, maybe, as many surmise, that trader sacrificed $2,000 per , thanks to “fat finger syndrome”, and had actually intended to sell at $8,200 (a much more likely sell-side price).
From a .
“A trader on the Bitstamp exchange reportedly put up a sell order of 5,000 at an oddly low price of $6,200. This move caused a massive price plunge on the exchange, setting up a temporary arbitrage opportunity.
The effect soon spread across the market to other exchanges with the market average falling to about $7,100. As at press time, had rallied to $7,300 on most of the popular exchange platforms.”
“Details are still hazy at this point but there are three likely theories for what happened — a whale dump, fat finger error, or a bot glitch. However, given the lack of significant volume variance at the time of the crash, it seems unlikely that the crash was as a result of a deliberate dump.
On the flip side, looking at the chart from Bitstamp, the dump occurred over a 10 to 12-minute period with the orders being continuously executing at consecutively lower levels than the market price.
Such a pattern reeks of manipulation but the tradeoff seems counterproductive unless they held high leverage short bets on another exchange, say BitMEX. Theoretically, the dump would cause massive liquidation of long positions thus ensuring profits for the trader.”
The Perspective Check Part
And so, out of ’s ten year history, with roughly six of those years offering commercial availability, if you purchased during any of the sub-$7,000 time periods — the vast majority of the intervening time — you’re in a profit position right now.
has attained a certain ATTATH (At The Time All Time High) multiple times, before quickly pulling back a bit, and then rising beyond, to a new all time high.
One example of this are the price dynamics in late 2017. first attained $7,000 on November 2, 2017, and then dropped back all the way to a low of $5,519 on November 12, 2017. From there, it started to rise again, briefly breaking $20,000 on December 17, 2017, an ATH (All Time High) it has held since that time.
Conclusion
Balanced perspective is both good, and critical to long-term success, in any high-risk, high-reward investment market. is no exception. And because many media commentators and bloggers don’t understand and other , the tone of any significant price drop tends toward the histrionic. This can be safely ignored by long term investors, and short term investors who are qualified to do their own research. And everyone else. Which is pretty much the entire point. There’s a phrase in the so-called cryptosphere: “Buy the dip”.
When a given market, such as , is generally trending upward, and then experiences a substantial dip in price, the savvy tend to buy the dip, to treat that price drop as a short term , and then keep holding for the long term. This doesn’t work perfectly, but I think it’s fair to say that those who understand the market fairly well have often made money doing this. Which is specifically why there’s no need to be concerned about the very recent and current price dip, from this past week’s highs, which were also 2019’s highs.
Finally, never invest more than you can afford to lose, invest wisely, and do your own research.
Disclaimer: Please note that any mention of investment or is solely my personal opinion, and is not to be taken as investment advice, in any way. Also, please note that some posts may contain affiliate links for services that I use and recommend, which pay a small amount for the referral.
About
Doug Sandlin is a performance optimization consultant for startups, projects and digital asset projects and investors. For more information, please visit
Published at Fri, 17 May 2019 20:17:00 +0000
