A good question, and a valid one. If only more people asked "why?"
Well for starters: the buy and sell walls that manoeuver the prices around on the exchanges are an easily visible indicator. I don't know if you've ever sat and watched an order book closely for an hour or two, you see some very unusual activity.
More importantly, if you were in control of the worlds finances, i.e. you were part of a major banking family or multinational corporation, would you not seek to dominate the possible future of finance. Wouldn't you use your wealth to buy in early, then spread sell off a bit, spread misinformation once the market peaked and then crash it only to rebuy once capitulation had set in? I would. I would be stupid not to.
From a fundamentals perspective, blockchain technology prices should be rising. Any wise individual in isolation can perceive this fact to be self evident. But put individuals into a crowd and herd mentality sets in. Those who steer the herd can benefit from it. In a 99% unregulated market, manipulation tools are a dime a dozen and all legal.
It would be an absolute miracle if large scale price manipulation was not a major factor in BTC and crypto price movements.
FYI, the orderbook is not what moves the price, ever. The visible orders are very very small compared to the market orders (which are never shown in the orderbook)
Sorry to burst this bubble, but market orders per day are 10-20 times bigger than all limit orders combined. Therefore the orderbook is useless information.
Good clarification and an important one. I have also looked at explored the orders that actually get on the blockchain via the block chain explorers that you can find online, but there is no way to keep up with that without a full days study. The speed of transactions are still faster than what the mind can capture by glimpsing.
So you're saying that this sort of thing synchronised simultaneously over several exchanges (which is how I normally see it) has no effect on price? I beg to differ and I then also raise the question as to why it is done.
What do you mean? A bid or ask wall occuring over several exchanges at the same time? Is that what you are asking?
If so, I can answer that. If you had millions to invest, you would want to make sure, that you get the best entry possible right? Of course a big buyer or seller will spread out his bids and asks over several exchanges, because if he did not, it would be difficult for him to get his big order filled at the same entry price. Unless an even bigger player wants to take the opposing part of his bid or ask.
He also does not want to put all eggs in one basket... as having all money on one exchange is the single most stupid thing you can do.
Have you ever looked at the orderbook during a big crash? If not, you should. Those limit orders mean absolutely nothing.
But those walls don't stay there, they vanish and reappear, and they're never at the trading price either, always a few dollars away from it. If the trading price reaches them, they vanish.
I must admit that I haven't caught an orderbook during a crash. Thanks. I'm making a mental note to do so.
im firstly glad that you responded with a well thought out respond and not just spamming comments! Secondly, some actual interaction here pleases me!"
back on topic though, I have watched the orderbooks when I trade, and it does seem fishy but nothing different from what you would see while trading stocks. The important thing I want to point out is that the blockchain allows you to see whats going on. Granted putting in orders and actually executing them are two totally different things. There have been tactics to jump the line and push prices one way or another by increasing the transaction fees that the buyer is willing to pay.
is it a dirty move? Certainly, is it manipulation? To an extent. Its visible and not being hidden, everyone gets to see it go on, therefore by the rules of the system it is acceptable. For that reason I dont call it manipulation, I just call it a design flaw that BTC has and could have easily been realized but people choose not to address it (another principal reason why i am NOT a fan of BTC).
You've actually address everything i wanted to say in your last paragraph too.
From a fundamentals perspective, blockchain technology prices should be rising. Any wise individual in isolation can perceive this fact to be self evident. But put individuals into a crowd and herd mentality sets in. Those who steer the herd can benefit from it. In a 99% unregulated market, manipulation tools are a dime a dozen and all legal. And certainly if there is an advantage position to take, any one with the power will take advantage of it. But in the world of crypto, manipulation is their own undoing as people can choose to step away from BTC and into others, there just needs to be practical use and application that benefits people on a capitalistic scale.
I think on a broader view, this is the case. Technical Analysis mumbo jumbo, forget that for a minute right? The ROOT question is: Does this technology benefit us? YES. Does this technology have real world application far and wide? YES.
After that, its a matter of who has the best tech and marketing. So we have to have real life parallels such as:
This is a battle of Floppy Disc vs ZIP Drives, and then CDs came along.
This is a battle of HDDVD vs Blu-Ray, and then broadband came along.
This is a battle of fuel efficient gas cars vs hybrids, and then high density lithium batteries came along.
This is cryptocoin #1 vs cryptocoin #2, and then a cryptocommunity came along (Steemit).
An equally good reply - thanks. There is one point I would like to stress, because I think you may have overlooked it: the blockchain does show all trades that took place, but it does not show the ones that didn't! Buy and sell walls don't appear on the blockchain, so there is not necessarily any record of the means used to steer the price once those walls have been removed.
The walls are not simple and they are not always just "a wall". You normally have one large wall and several smaller ones closer to the trading price to do the fine tuning. I've also often seen staggered walls: large fixed amount buys (e.g. 50 BTC each) staggered at 20 or 50 USD intervals to stack up the buy or sell side of the order books. I've seen it done one sided and I've seen it steered from both a buy and sell side at once. I've also seen it quickly alternated between the two.
Despite comments to the contrary, I have watched this in action many times for hours at a time (yes, I know, mundane things fascinate me), there is no doubt in my mind that BTC price is often manipulated through the orderbooks. It may also be done elsewhere too, I choose the orderbooks because they are clearly visible, but it does happen. Often. The fact that it could also happen with stocks does not negate the fact that it happens with BTC.
I call it "manipulation" because it is only semi-visible, and even then only to those who are alert and who know what to look for. It is also only carried out by the exceptionally wealthy who have a few thousand BTC available to steer the markets with. This puts it beyond the reach of the ordinary trader, who becomes a pawn to be exploited by the fat cats. They scare him, they psych him out, they outlast his staying power. They force him into a bad trade and then they gain the wealth that he lost. They manipulate the hell out of the traders in general, which is why I call this spade a spade.
The prize is calculated as the equilibrium of the top 20 exchanges by volume. Just throwing in a 1000 BTC bid or ask on one or even five exchanges at the same time does not change or manipulate the price whatsoever.
To have the price of BTC jump a few thousand Points in a short amount of time, you would need to throw in market orders like 30-60 Billion $ spread across the top exchanges, accepting any ask price... That would be manipulation.
How so? Everything is transparent on a blockchain, what leads to that theory?
A good question, and a valid one. If only more people asked "why?"
Well for starters: the buy and sell walls that manoeuver the prices around on the exchanges are an easily visible indicator. I don't know if you've ever sat and watched an order book closely for an hour or two, you see some very unusual activity.
More importantly, if you were in control of the worlds finances, i.e. you were part of a major banking family or multinational corporation, would you not seek to dominate the possible future of finance. Wouldn't you use your wealth to buy in early, then spread sell off a bit, spread misinformation once the market peaked and then crash it only to rebuy once capitulation had set in? I would. I would be stupid not to.
From a fundamentals perspective, blockchain technology prices should be rising. Any wise individual in isolation can perceive this fact to be self evident. But put individuals into a crowd and herd mentality sets in. Those who steer the herd can benefit from it. In a 99% unregulated market, manipulation tools are a dime a dozen and all legal.
It would be an absolute miracle if large scale price manipulation was not a major factor in BTC and crypto price movements.
FYI, the orderbook is not what moves the price, ever. The visible orders are very very small compared to the market orders (which are never shown in the orderbook)
Sorry to burst this bubble, but market orders per day are 10-20 times bigger than all limit orders combined. Therefore the orderbook is useless information.
Good clarification and an important one. I have also looked at explored the orders that actually get on the blockchain via the block chain explorers that you can find online, but there is no way to keep up with that without a full days study. The speed of transactions are still faster than what the mind can capture by glimpsing.
So you're saying that this sort of thing synchronised simultaneously over several exchanges (which is how I normally see it) has no effect on price? I beg to differ and I then also raise the question as to why it is done.
What do you mean? A bid or ask wall occuring over several exchanges at the same time? Is that what you are asking?
If so, I can answer that. If you had millions to invest, you would want to make sure, that you get the best entry possible right? Of course a big buyer or seller will spread out his bids and asks over several exchanges, because if he did not, it would be difficult for him to get his big order filled at the same entry price. Unless an even bigger player wants to take the opposing part of his bid or ask.
He also does not want to put all eggs in one basket... as having all money on one exchange is the single most stupid thing you can do.
Have you ever looked at the orderbook during a big crash? If not, you should. Those limit orders mean absolutely nothing.
But those walls don't stay there, they vanish and reappear, and they're never at the trading price either, always a few dollars away from it. If the trading price reaches them, they vanish.
I must admit that I haven't caught an orderbook during a crash. Thanks. I'm making a mental note to do so.
im firstly glad that you responded with a well thought out respond and not just spamming comments! Secondly, some actual interaction here pleases me!"
back on topic though, I have watched the orderbooks when I trade, and it does seem fishy but nothing different from what you would see while trading stocks. The important thing I want to point out is that the blockchain allows you to see whats going on. Granted putting in orders and actually executing them are two totally different things. There have been tactics to jump the line and push prices one way or another by increasing the transaction fees that the buyer is willing to pay.
is it a dirty move? Certainly, is it manipulation? To an extent. Its visible and not being hidden, everyone gets to see it go on, therefore by the rules of the system it is acceptable. For that reason I dont call it manipulation, I just call it a design flaw that BTC has and could have easily been realized but people choose not to address it (another principal reason why i am NOT a fan of BTC).
You've actually address everything i wanted to say in your last paragraph too.
I think on a broader view, this is the case. Technical Analysis mumbo jumbo, forget that for a minute right? The ROOT question is: Does this technology benefit us? YES. Does this technology have real world application far and wide? YES.
After that, its a matter of who has the best tech and marketing. So we have to have real life parallels such as:
This is a battle of Floppy Disc vs ZIP Drives, and then CDs came along.
This is a battle of HDDVD vs Blu-Ray, and then broadband came along.
This is a battle of fuel efficient gas cars vs hybrids, and then high density lithium batteries came along.
This is cryptocoin #1 vs cryptocoin #2, and then a cryptocommunity came along (Steemit).
So I think you hit the nail on the head.
An equally good reply - thanks. There is one point I would like to stress, because I think you may have overlooked it: the blockchain does show all trades that took place, but it does not show the ones that didn't! Buy and sell walls don't appear on the blockchain, so there is not necessarily any record of the means used to steer the price once those walls have been removed.
The walls are not simple and they are not always just "a wall". You normally have one large wall and several smaller ones closer to the trading price to do the fine tuning. I've also often seen staggered walls: large fixed amount buys (e.g. 50 BTC each) staggered at 20 or 50 USD intervals to stack up the buy or sell side of the order books. I've seen it done one sided and I've seen it steered from both a buy and sell side at once. I've also seen it quickly alternated between the two.
Despite comments to the contrary, I have watched this in action many times for hours at a time (yes, I know, mundane things fascinate me), there is no doubt in my mind that BTC price is often manipulated through the orderbooks. It may also be done elsewhere too, I choose the orderbooks because they are clearly visible, but it does happen. Often. The fact that it could also happen with stocks does not negate the fact that it happens with BTC.
I call it "manipulation" because it is only semi-visible, and even then only to those who are alert and who know what to look for. It is also only carried out by the exceptionally wealthy who have a few thousand BTC available to steer the markets with. This puts it beyond the reach of the ordinary trader, who becomes a pawn to be exploited by the fat cats. They scare him, they psych him out, they outlast his staying power. They force him into a bad trade and then they gain the wealth that he lost. They manipulate the hell out of the traders in general, which is why I call this spade a spade.
The prize is calculated as the equilibrium of the top 20 exchanges by volume. Just throwing in a 1000 BTC bid or ask on one or even five exchanges at the same time does not change or manipulate the price whatsoever.
To have the price of BTC jump a few thousand Points in a short amount of time, you would need to throw in market orders like 30-60 Billion $ spread across the top exchanges, accepting any ask price... That would be manipulation.