By Ed Ludbrook
I was not surprised to see Bitcoin prices, and therefore all crypto, down 10% on May 10. It was the third Bull Trap played on the crypto markets in 18 months!
A Bull Trap is when everyone says prices are about to rocket up, ie all the basic Bulls are positioned and ready to go. Then the market is ambushed by some big traders who smack the price down producing a major collapse in prices within a few hours.
It happened on 15 November 2018.
25 September 2019 (ahead of the Bakkt launch).
10 May 2020 (ahead of Bitcoin halving).
It happens between 00–04.00 UTC+1200. Early morning Asian time. The perfect time. European traders are asleep, America has stopped trading for the night and Asia is just waking up. It is the longest period of ‘quiet time’ with the minimum number of active traders.
Crypto is dominated by Chinese trading whales. So imagine those big traders. On 100 times margin. Their $50 million investment can be leveraged into 100 times meaning they can smack the market with $5 billion in selling orders at once.
At a specific time, they hit all buy orders on a couple of big exchanges. Their $5 billion is biggest enough to fill all buy orders and more. So now they are hitting buy orders 2 - 3% below the previous high and now stop-losses are triggered so automatic selling is accelerating market sales. Buyers withdraw so the market races down normally to 10%. The big traders than can buy back to close off their positions with a 10% profit on $5 billion = $500 million. Not bad profit on a $50 million investment for a few hours work!
The fact is that Pre-Bitcoin Halving Pumps are followed by Pre-Bitcoin Halving Dumps followed by a major move up. Buy as much crypto as you can. Average buy. Anything below $10k.
As the graph below shows. The market is either going to go up now OR it’ll trade down, maybe into $7k area before breaking upwards. And when we are talking up, this is the 3 - 10x upwards!
Buy as much as you can and take a 1 - 2 year vision to achieve 5 - 10x results.