Happy new year everyone, I am very glad that as many of us who made it to this year made it, and hope the new year brings unimaginable blessing our way going forward.. Amen.
Now, I have something I wish to share concerning the sudden crash we experienced yesterday, which saw bitcoin crash to around 40,000+ from $45,000+.
Bitcoin so far have very much recovered, but Now..
- What do you guys think about that sudden crash?
- What do you think was playing out?
Do you really think it was all about
Matrixport's report saying all bitcoin spot ETFs will be rejected by the SEC? No, not at all, it's all a game plan, a strategy to make us panic short and spot sell our bitcoins.
In crypto, learn not to care much about sudden flash crash, as long as its bitcoin we are talking about, but care more, and be most afraid of slow bleed.. I will explain this below - read on.
Investors responds to flash crash, faster than they respond to slow bleed, flash crash is a tool that is used to instigate fear, panic, causing the chicken hearted to instantly (without hesitation) dump their position(bitcoin).
Flash Crash is a tool also used by market makers to flush out over-leveraged traders, and trader who are longing late.
So after the flash crash, the market mostly recovers in no time or after a very short period of time, and those who sell their spot or short; out of panic always end up as losers.
What we investors, should be mostly afraid of is slow bleed, for this is the silent killer.
Now, this is an analogy that is scientifically proven to be true -
"Place a rat in a boiling water and it will jump out immediately, but place it in cold water and be heating the water slowly, the rat will remain in that water until the water gets too hot and kill it." Humans are reactive to sudden sharp changes in stimulus, but extremely dull and unreactive to things that occur over a long period of time.
When they want us to sell, because it's a good time to buy, they will implore the flash crash strategy, causing several investors to panic sell, thereby, giving them the opportunity to buy cheaper.
By when they want us to hold, so they can silently sell at a good price, they'll typically bleed the market slowly, not alerting us - leaving us with a persistent optimism that "reversal is coming", until will find ourselves in the middle of a bear market, with no possibility of selling without incurring a huge financial loss.
Note that every thing I said here about flash crash and slow bleed is specifically in relation to bitcoin investments, a flash crash for altcoins may completely mean a different thing, which for example could mean a rugpull, bankruptcy and so on.
So lets learn to note that, things won't be always as they seem, market makers and manipulators will always try to take advantage of the chicken hearted investors, learn to be know when to sell, and buy back cheaper later on, and when to actually hodl, because big things are coming and they want you to sell so they could buy cheaper.
First off, great and informative post you got here going, there's not a lot of people who know much about the difference between the two, let alone their existence in the first place so contents like these are surely helpful in opening the people's eyes. Now back to your questions
The thing is that for me, they both are equally as deadly and damaging, but for different locales for that matter. Flash crashes will affect people with paperhands, people who are in it for the quick profit and will sell their spot immediately at the first sight of a dump. On the other hand, slow bleeds will affect those who have diamond hands in this industry—people who are known to hold all throughout the rain and the storm in the name of crypto and profit. Not because they are dull and unreactive to the consistent drops, but because they have complete faith in the cold that they hold. It's way easier to spot a flash crash, a slow bleed is harder to figure out but it's mostly circumvented by the market's pulse anyway so it's not as damaging as most people make it out to be, but it definitely puts a dent to your portfolio especially if you're not careful enough to do audits and shit.
At the end of the day, I'd still rather be a diamondhand in the midst of a slow bleed than be a paperhand that yanks at the sight of a dump. Especially when it comes to bitcoin who is cyclical in nature always having a stake in it regardless of the market's situation is going to be the smartest and best thing that I could do for myself.