People today only seem to understand when the price of a crypto asset (be it Bitcoin, Ethereum, Litecoin or any other), goes up or down, but they seem to understand little (or nothing) about something more important than the price: The point of the market.
The crypto market is divided into phases
Like any other type of asset, crypto assets have a market, and this market is divided into phases. The phases are nothing more than moments that show us that the market price of a crypto asset (provided that said crypto asset is backed by a solid project), will sometimes be at high prices and other times it will be at low prices; or put another way; the phases show us that everything in the cryptoactive market is nothing more than fluctuations.
The fluctuations are given by times when large crypto holders and traders buy and sell respectively. And when I talk about big crypto holders and traders, I am talking about very big holders, or what in the popular jargon we call "Whales".
These whales accumulate the cryptos that interest them, through a simple method: They achieve it by driving the prices of said cryptos to ever lower levels by mere speculation. In this process in which they are making increasingly lower offers in the market, for a greater amount of crypto, they initially manage to buy a little along the way, and every time they manage to make a purchase, this constitutes an effective movement in the price of the asset to down.
As the crypto asset falls, small traders and investors start to get impatient, and start selling their holdings, which causes the market price of the crypto asset in question to continue to fall even more, and meanwhile, the whales continue to fill their wallets of more and more crypto bought at ever lower prices.
That is technically the process that the whales in the markets repeat over and over again and it is precisely what generates bear trends such as the one we are currently seeing throughout the crypto space.
What will happen?
Speaking only of the case of serious projects such as Bitcoin, Ethereum, Litecoin, Polygon, Cardano, and many others, what will happen is that the distribution phase will follow.
In this distribution phase, the crypto market will be in an upward trend. And this will happen because during the distribution phases, the exact opposite of what happens in the accumulation phases happens.
That is to say, the distribution cycle occurs because the whales have already accumulated all the cryptos they were able to accumulate, in the greatest amount possible, and at the best possible price, and thanks to this, they begin to make offers to sell, and as they manage to sell effectively, the price is pushed higher and higher, which means that more and more people are adding to buy in the market.
As they sell, the whales raise their offer prices higher and higher, matching the price levels that buyers are willing to pay for the crypto asset they are interested in. But in this marriage of buy and sell orders, those with the higher levels of liquidity in the markets always win, that is, the whales.
To better explain the process, I will exemplify it, a whale makes an offer, that is, it places an order to sell a crypto at a certain price; and if it does not get a buyer for that price level, it have two options that will depend on their decision: On the one hand, it can lower the price a little to see if it can sell, and on the other hand, it can decide to hold the price for a certain time. This dynamic also happens over and over again in the markets and is what generates bullish cycles or trends.
Because the whale can afford to choose either of these two things for the simple reason that it has more than enough economic and financial liquidity, it is solvent, and therefore it does not need to take risks or make any move it does not want to make... And this is exactly what differentiates whales from medium and small investors and traders.
This freedom of action that whales enjoy, as a result of their liquidity, is what allows them to act freely and assertively both in bullish and bearish trends, because they themselves are the ones who create said trends (as I said before).
What we know about the present moment
We know that we are in a bearish moment in the crypto market (we are in a full bearish trend), but this will change in a few months; and when that happens, we must be prepared to take advantage of the situation in the best possible way.
Because Bitcoin and every serious cryptocurrency in the market will go into an uptrend; and that will show that the whales will be winning by distributing (by selling) all the cryptos they accumulated in the downtrend.
The point here is, be prepared to make the most of the points to the upside. From my point of view, we should then take advantage of the current accumulation or downtrend phase, to buy cryptos when the whales are doing it; because without a doubt, there is no other better time to buy cryptos in the markets.
And therefore, when the crypto market goes up, it will be the best time to sell, because that is when the whales will be doing it effectively and taking their respective profits.
The fact is that we must always identify what the whales do and imitate it, and the best way is to identify the general trends that are taking place in the crypto market respectively. Knowing it, as in fact it is very easy to know it through the price action of the cryptos and through the analysis of the graphs with indicators, we will only have to draw strategies and plans that put us in the same direction that the whales with their actions. Because the wisest thing will always be to do what the whales do, and never ever contradict them.
And what do you think about the topic discussed?