Why BTC pumps and dumps

When Will Bitcoin Pump or Dump?! Watch THESE!!

By Guy

📉Bitcoin and the financial market📈

For sake of simplicity, let’s imagine the entire financial market as a pool filled with different assets that you can invest in. In the shallow end of the pool you’ll find low risk, low reward investments like government bonds. In the middle part of the financial market pool, you’ll find medium risk, medium reward investments such as “value stocks”. In the deep end of the financial market pool, you’ll find high risk, high reward investments like Bitcoin.

🤷‍♂‍What moves financial markets?🤷‍♂‍

Investors are constantly trying to maximize rewards while keeping risk at a minimum. This is why most investors have exposure to assets in all depths of the pool – government bonds, value stocks, growth stocks, and crypto like Bitcoin. Most investors will periodically adjust their portfolios depending on market stability. If the markets are stable, they make more risky investments. If the market is unstable, they move to safer investments. Market stability and even growth can be artificially sustained through government stimulus alone. This tends to increase the wealth anyone holding assets like stocks both directly and indirectly.

⌛Long term Bitcoin price movers⌛

Bitcoin itself was designed to do this but has since become more of a store of value than a currency. This is because Bitcoin has a maximum supply of 21 million BTC. This makes BTC akin to gold, which also has a limited supply. Although new BTC is mined about every 10 minutes, the amount of new BTC being mined is cut in half about every four years. Assuming demand stays the same, this 50% reduction in supply would lead to a doubling in price roughly every 4 years. Demand for Bitcoin been increasing gradually over the years, creating a predictable 4-year boom-bust cycle.

📅Short term Bitcoin price movers📅

The first factor to look out for is the amount of BTC on cryptocurrency exchanges. The less Bitcoin there is, the easier it is for Bitcoin to move to the upside. Bitcoin whales are the second factor to keep in mind when analyzing Bitcoin’s short term price action. Whales can move large amounts of cryptocurrency to exchanges, crashing the price when they sell. The third short term factor in Bitcoin’s price is liquidations on futures exchanges. Exchanges will liquidate overleveraged positions to remain solvent, adding more sell pressure when prices drop.

📰Example of Bitcoin price movement📰

Consider the chain of events that followed an announcement like Tesla buying Bitcoin. Existing Bitcoin holders prepare for big leap as the price explodes due to new investors rushing in. Whales know that the price will not go above a certain amount, so place sell orders slightly below their target. When these sell orders are triggered, the price drops. This price drop spooks new investors and weak hands, further aggravating the dip. This aggravated dip triggers overleveraged positions to be liquidated, decimating the price.

~~~~~

📜 Disclaimer 📜

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.

Latest videos

Is This The RECESSION are we in a recession
Is This The RECESSION?! Here’s The FACTS You Need To Know!!
Is This The RECESSION are we in a recession

Is This The RECESSION?! Here’s The FACTS You Need To Know!!

July 5, 2022 2 min read
Crypto News Cardano Bitcoin ETF Cosmos Voyager
Crypto News: Cardano, Bitcoin ETF, Cosmos, Voyager & MORE!!
Crypto News Cardano Bitcoin ETF Cosmos Voyager

Crypto News: Cardano, Bitcoin ETF, Cosmos, Voyager & MORE!!

July 4, 2022 2 min read
central bank cbdc plans
Crypto Holders WATCH OUT!! THIS Is The Future THEY Want!!
central bank cbdc plans

Crypto Holders WATCH OUT!! THIS Is The Future THEY Want!!

July 3, 2022 2 min read
CRAZIEST Crypto Hearing EVER Here’s What Went Down
CRAZIEST Crypto Hearing EVER! Here’s What Went Down!!
CRAZIEST Crypto Hearing EVER Here’s What Went Down

CRAZIEST Crypto Hearing EVER! Here’s What Went Down!!

June 30, 2022 2 min read
Top 5 BEST Hardware Wallets Which Are The SAFEST
Top 5 BEST Hardware Wallets: Which Are The SAFEST?!
Top 5 BEST Hardware Wallets Which Are The SAFEST

Top 5 BEST Hardware Wallets: Which Are The SAFEST?!

June 29, 2022 2 min read
Polkadot Deep Dive Can DOT survive the bear market
Polkadot: Can DOT Survive The BEAR Market?! Deep Dive!!
Polkadot Deep Dive Can DOT survive the bear market

Polkadot: Can DOT Survive The BEAR Market?! Deep Dive!!

June 28, 2022 2 min read
Crypto News Harmony Celsius Voyager Solana FATF
Crypto News: Harmony, Celsius, Voyager, Solana, FATF & MORE!!
Crypto News Harmony Celsius Voyager Solana FATF

Crypto News: Harmony, Celsius, Voyager, Solana, FATF & MORE!!

June 27, 2022 2 min read

Related videos

Is This The RECESSION are we in a recession
Is This The RECESSION?! Here’s The FACTS You Need To Know!!
Is This The RECESSION are we in a recession

Is This The RECESSION?! Here’s The FACTS You Need To Know!!

July 5, 2022 2 min read
Crypto News Cardano Bitcoin ETF Cosmos Voyager
Crypto News: Cardano, Bitcoin ETF, Cosmos, Voyager & MORE!!
Crypto News Cardano Bitcoin ETF Cosmos Voyager

Crypto News: Cardano, Bitcoin ETF, Cosmos, Voyager & MORE!!

July 4, 2022 2 min read
central bank cbdc plans
Crypto Holders WATCH OUT!! THIS Is The Future THEY Want!!
central bank cbdc plans

Crypto Holders WATCH OUT!! THIS Is The Future THEY Want!!

July 3, 2022 2 min read
CRAZIEST Crypto Hearing EVER Here’s What Went Down
CRAZIEST Crypto Hearing EVER! Here’s What Went Down!!
CRAZIEST Crypto Hearing EVER Here’s What Went Down

CRAZIEST Crypto Hearing EVER! Here’s What Went Down!!

June 30, 2022 2 min read
Top 5 BEST Hardware Wallets Which Are The SAFEST
Top 5 BEST Hardware Wallets: Which Are The SAFEST?!
Top 5 BEST Hardware Wallets Which Are The SAFEST

Top 5 BEST Hardware Wallets: Which Are The SAFEST?!

June 29, 2022 2 min read
Polkadot Deep Dive Can DOT survive the bear market
Polkadot: Can DOT Survive The BEAR Market?! Deep Dive!!
Polkadot Deep Dive Can DOT survive the bear market

Polkadot: Can DOT Survive The BEAR Market?! Deep Dive!!

June 28, 2022 2 min read
bottom for crypto markets
Was This The Crypto BOTTOM?! Are We Heading LOWER?!
bottom for crypto markets

Was This The Crypto BOTTOM?! Are We Heading LOWER?!

June 26, 2022 2 min read