The Irrationality of the Crypto Market
Jerome Powell spread some FUD yesterday... From his point of view and the institution he heads, he probably stated some facts and predictions, but the crypto market interpreted them as FUD...
What do you mean... the Fed "is not allowed to own bitcoin"? What a piece of FUD, right? Well, not really, it's called the law. If one doesn't like it, one needs to change it. The question is... is bitcoin is a subject so important that someone with a say would want to change the Federal Reserve Act for it?
What I'd be curious about is if Trump knew it would come to this, or if he is taken by surprise by this roadblock. I don't think he was taken by surprise. Now... he appointed some crypto-friendly people in his future administration, so maybe he is genuinely pro-crypto. The question is what now? Is the idea of bitcoin as a strategic reserve in the US dead for the time being or not?
To be a match for gold, bitcoiners surely covet for the status of strategic reserve in the US for BTC. If this is going to happen or not, it will be a long process, not something Trump could sign and make happen the day or week he comes into office. And we know how anxious people in the crypto space are... 😀
That's probably why we saw that knee-jerk reaction in the market yesterday. Ok, let's say people were disappointed in bitcoin's regard and sold. But how was this in any way justified for the alts? None of them were going after the strategic reserve status and lost nothing. Was the market expecting the Fed to keep cutting rates like crazy next year? I wasn't!
That's where the irrationality of the market comes in and where probably the dreadful hyper-leveraging instruments that enough people use in crypto so loosely and mindlessly and amplify dips through liquidations.
Either way, I took the chance last night and bought a few more alts as they were bleeding hard. Unfortunately, I didn't have any more liquid HBD to buy more HIVE at that time.
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Before the dump I think there was something like 3 billion in longs between 100-105. It was a recipe and fuel for a correction and all Powell had to do was throw the lit match with some fud and boom, back to 100 we go from the liquidations and panic sales from a spooked market.
For those of us who are in this for the long haul, just another day in crypto. A cow farts in the wrong field and it's all doom and gloom. Let the day traders play the slots as both sides gamble themselves into liquidation trying to get rich quick. Then we can find ourselves a nice neutral place to move up again. DCA removes all fear of the hourly, daily, weekly and monthly turmoil.
I agree. I often said there's too much of a gambling mentality in crypto. I watched a video with an influencer who was into the small cap AI coins of all sorts the other day, and boy... he seemed hit by something close to insanity. And maybe he was even successful, I don't know nor do I care. I don't want to get like that, whatever state of mind that was.
It was an overreaction and I skipped out on the purchasing of anything. I don't think Jerome will be in the same spot when Trump gets in. So I think his opinion isn't as important.
Well, maybe it wasn't an overreaction and the expectations were over-conflated. I won't expect any wonders when Trump gets in.
I think it's unnecessary FUD. Market makers wanted this and it happened. It looks like market makers want the market to go down a little more.
Well, it's the Christmas red, maybe... Coca Cola be damned! If Germans had it their way, we would've had a green Santa. 🤣
I think at this point anything that reeks of FUD will dump the market whether it makes sense or not. I saw a lot of tweet talking about that news regarding the FEDS not owning BTC. sentiments are a double-edged sword in crypto and it can be really surprising.
Yeah, that was probably the trigger. We might see the market go lower, although for some alts this would be really bad.
It's pretty frustrating to be honest. Once again it's left to us sane ones to steady the market by slowly neutralising the bleed with our DCA's and HODLs. I'm reminded of something someone posted about how the number of people who actually 'get' crypto is much lower than the amount of people in crypto. While the fed statement may be a blow of sorts to confidence, BTC isn't a US coin, it isn't a USD coin.
There's a whole 200+ country and world economy out there and the fed can fud all over BTC all they like, even without the fed embracing bitcoin, it doesn't change BTC for the rest of the world, it actually provides even more opportunity to front run the US in this space. And competition is a bullish scenario the fed wont ignore when other countries leapfrog any delay in the US taking charge of ownership of the opportunity in this space.
I feel it's an overreaction. Lol. Anyway, there has been rebound the past couple of hours. Let's see what happens.
It was an overreaction. But it may have turned into a trigger for a wider correction.
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