A brief understanding of markets

This isn't meant as financial advice for you. It's meant as documenting my financial journey to me so that when I get back to this spot I can remember it.

I didn't do much trading before I got into crypto. I didn't really like it and I wasn't very good at it. A good chunk of the problem is that I was pretty delusional about how the world worked. I was raised as a progressive democrat in Massachusetts suburbs. This is about as delirious as one can really get.

Anyway, for a while I did a lot of crypto trading back in 2017. That was fun when prices were going up, but it was terrible when prices were going down. I was manically checking my portfolio and freaking out as it went down. I ended up consolidating it all to Steem.

Anyway, after doing this stuff longer I started reading Wyckoff. he's the guy that basically created technical analysis (TA). When people are charting lines and talking about support and resistance these are terms that were popularized out of his work.

A big part of what he write about is how the entire market is basically setup for whales to fleece everyone else. I've been managing hive-engine and tribaldex for a while, and watching trading of millions of dollars of assets. I feel more comfortable with this statement after the experience.

Why does this matter now? Well, I see the price of bitcoin and a lot of assets going down pretty far. That seems to be happening for 2 major reasons.

1. Macrocyclic environment is bad.
2. Mega bears are pushing down the price of BTC hard.

You should probably talk to someone even more experienced about 1 if you really want to get a good understanding of it. I've heard concerns from it's all Putins fault, to it's money printing, to it's a shemitah year and the jews that run everything are obligated to smash markets every seven years. I think those are mostly bullshit and it's frustrating to hear about 1 group of people being blamed for all of this mess.

That said, the people I'm most comfortable blaming are the biggest whales in the game: The Central Banks. They stopped buying/selling about a year ago, and we've seen the havoc that caused. Add in the rate hikes and the environment around energy production and you have high interest against high inflation, and the money printing and reckless spending by the US government over the last 20-30 years leads to some giant mess.

Anyway, 1 has made for a rough market, but 2 is where the fun really is.

Alan Greenspan used to talk about "irrational exuberance" in the stock market. I didn't get why people would push prices so high or push them so low. Aren't things basically worth what they were a month ago?

Well, after having watched things for a while and taking in Wyckoff's mentality of it's all about fleecing people I think I have a quality understanding.

Bulls and Bears are the same people. The question of whether you're a bull or bear is really about "do you own a lot of this stuff?" If the answer is yes, you're a bull. If the answer is no you're a bear. Bears become bulls when they aqcuire the thing. Bulls become bears when they offload it.

Where things get really wild is that Bulls and Bears like to mess with eachother. You can see this most routinely in little short squeezes. Lots of people start leveraging their money that markets will go down. A bigger player comes in and forces the market up, and all the little guys get liquidated trying to buy back their shorts at elevated prices to satisfy the terms of the short.

So, that's what happens routinely, but let's look at the extremes at the end of cycles. Bitcoin just had it's worst month ever clocking in a 40% decline in a single month. It was marked by destruction of many different companies who got liquidated.

This article has a good summary of them.
https://www.zerohedge.com/crypto/bitcoin-breaks-below-19k-sec-rejects-spot-etf-jpm-says-deleveraging-well-advanced

A while back it was actually peter schiff that called that companies like Celsius were extremely risky. They took customer funds on the promise of 20% annualized returns and to get there they took risky trades. They were leveraged and got rekt by bears.

I think the piece that I'm trying to impart more than anything is that it's not happenstance that the bears rekt companies like Celsius. It was in fact the entire point. you'd have to double the price of bitcoin to have it reach it's 200 week moving average. Bitcoin is very rarely this far below the price. I don't think it got there organically. I think powerful people worked together to shove the price far down.

Why would they do this? Think of Celsius as a giant financial Pinata. And the bears line up and whack price down and down, and eventually Celsius breaks and the bears get all that sweet sweet honey.

You know what the bears do right after they get the honey? They stop being bears. Now they are bulls. What do they do? Pump the price. Because the end goal of the bears wasn't to just get a position in bitcoin. The goal of the bears was to get a position in bitcoin at the lowest price possible and then sell it to others (retail) at the highest prices possible.

So, where will the price of bitcoin be tomorrow? I don't know. There's a good chance the macro economy is a disaster and the whole thing isn't strong enough to rebound right now.

There's also the chance that bitcoin bears push the price of bitcoin up regardless of the overall economy.

Lastly there's the chance that the economy recovers. I think this would mostly happen by the government blinking on their energy policies and instead of cutting off oil and gas drilling and exploration actually opening it up. Also, they could reverse course on the fed rate hikes. Both would usher in a ton of money into markets.

So, overall, there's a couple of ways this could go. My general plan is to hodl through the lows. I'm already dead inside from having done that with steem from $10 to 8 cents. I doubt this market can kill me again. But that's not what I really wish I was doing...

More than anything I really just regret hodling through all time high prices. There would be nothing cooler than going on a shopping spree right now. So, I keep telling myself that I need to sell at the next all time high to make sure I can buy at the next time BTC is underneath the 200 week moving average. I just have to remember that sanity and joyful purchasing at the low is more important than absolute eupohoria at the top.

Again, none of this is supposed to be financial advice for you. It's just marking my financial journey for me. Hopefully someone sends me this blog at the next all time high for BTC and I remember to sell more cause living through deep bear markets is no bueno.