It is easy to read tea leafs when you paint them. Bull flags, cups with handles, nice triangles, fomo triggers and panic sprinkles. All can be on display, with some saying they’re not even trying to hide it anymore.
Here’s a whale who during sleepy volumes decided to shake things up, buy some bitcoins, send fomo ripples, let it go back to sleepy sideways, then crash everyone’s hopes of a recovery.
The sudden increased volume is what might give it away. Within one minute, that spiked. Just as did price, up by around $500.
Volume then returns to where it was, with price maintaining the new level for some hours. Then, red volume rises to near the initial green volume levels. Price returns back to where it was.
One way to profit quite a lot from this is perhaps described in an annotated chart publicly shared online:
Trading, of course, is a zero sum game. Worse, due to exchange fees. In the long run everyone loses day trading, only the exchange wins. But not if you can fool other traders.
Painting Technical Analysis patterns in short term intervals can be one way to fool them, which is why no one pays attention to short term based pattern analysis.
Another way is to manipulate the spot price so as to profit from futures. Wall Street has entered this space now, and they’re very much the masters of it, but can a market that handles billions in volume really be so easily manipulated?
Well, no one is sure how much of this volume is real. Bitfinex somehow tops volumes for bitcoin, even though they had a lot of problems with fiat bank accounts, and there’s allegations they use wash trading.
There are, of course, ways to counteract this apparent manipulation. Another whale, for example, could have sold into the one above, but it can be risky and that whale might end up bankrupt. It would instead perhaps be smarter for him to join in the action.
That’s until the strategy becomes clear, or the “pulse” changes, at which point it probably won’t work anymore and the whale gets burned. But that loss might be only one of his 4 or 5 profit runs. A small price to pay for so much fun.