The Crypto Market - What's Going On?
Disappointment For Some
When XRP experienced its SEC victory not too long ago, many believed that it was the beginning of a new bullish season. Euphoria always tends to draw market participants into an almost hypnotic state. However, the sideways chop has prevailed with sporadic moments of volatility. This was the expected price action that I began to expound upon back in June. Sideways chop with sudden volatile spikes is classic textbook behavior for this stage of the game.
This is the beginning of a new bullish phase, but as I highlighted some months ago, Chapter 1 of a new bull market is essentially still a time of accumulation. This phase has to be preceded by a bottoming formation. This is what I referred to as the “safe accumulation” zone. As I pointed out in August of 2022, prime accumulation was likely to kick in during September of that year. Coincidentally, that is exactly what happened.
The current phase of accumulation is predominantly taken advantage of by the whales and institutional investors. The reason behind this is that a bottom is in. Even if the previous bottom is retested, these levels provide the highest level of safety and are so are maximized by more risk-averse investors, who are essentially now looking to position themselves for the upcoming bull market.
Remember, this doesn’t exclude volatility. However, a trend reversal does provide a reasonable amount of support and confidence, especially for larger investors. As mentioned in “The Accumulation Zone – Where Warfare Takes Place”, it’s now time for a series of bullish and bearish news events. Essentially, the market would remain in a state of sideways chop, if left to its own devices. Volatility is purposefully induced into the market.
Warfare & Manipulation
This usually plays out as a “combination strike”. A bearish news event is followed by a bullish event, and vice versa. This combination is usually shuffled around a bit, to remove predictability. An otherwise sideways market is randomly interrupted by spurts of volatility, ultimately enabling the maximization of the zone. It’s amazing how few people realize the level of manipulation that takes place in financial markets.
It is perhaps not as “sinister” as it appears. However, bulls are desperate to get the bull market started, and larger players are desperate to see lower prices. This dynamic creates a battleground. Even though this type of dynamic is always at work within financial markets, it intensifies during this period. Many investors are becoming concerned that the market is going to tank, and that this bear market is going to extend even further.
We have also seen an increase in Binance FUD, which is perhaps the most significant issue at hand. However, this is only an issue if enough of Binance’s business arms are affected, and/or, if criminal charges can stick. There has been a lot of FUD, even from within the Crypto community. It’s important to note that BNB is performing significantly better than pretty much every other top-tier Crypto asset.
Ethereum is the only major Cryptocurrency modestly outperforming BNB. The phasing out of BUSD is not necessarily bad news. Provided, CZ has modeled his empire correctly, I am not that concerned, at this stage. It’s also important to note that JP Morgan and other banking behemoths are constantly having to pay fines for money laundering, market manipulation, and price fixing. I am not making light of, or endorsing criminal activity.
What I am however saying is that it is common practice, unfortunately… and has ironically been “normalized” by TradFi. You can refer to an article by Dividend.com if you wish to peruse a brief history of JP Morgan’s fines and penalties.
This does not excuse Binance if they are found to be guilty of criminal activity. However, did JP Morgan cease operations after being found guilty? Not only that but the entity has been found guilty numerous times and has paid billions in fines over the years. JP Morgan is held in high regard by many, and is painted in a positive and professional light, and yet their track record is nothing short of a disgrace.
You Need To Understand The Motivation
I have often spoken of the amalgamation of Crypto and TradFi. Essentially, large players are looking to dethrone the Crypto leaders, to position themselves at the head of the table. This is likely to be an ongoing battle for CZ, and others, given they can escape the current attack. Whether personalities and entities are guilty or not, this is the current mode of warfare. I think the ongoing Trump “witchhunt” is evidence of this.
It seems to be the most favored approach these days. Not only do you get to remove your competition, but also damage their credibility and further influence. Politics is at the heart of everything that is associated with wealth and capital. This also acts as a form of confluence, regarding my viewpoint of the “accumulation zone”. It will be an ongoing war with isolated victories, that will perhaps act as catalysts.
This is primarily why I suggested a lengthy Chapter 1. You cannot expect significant moves in such a climate. However, you can expect volatility, which is likely to gravitate toward the accumulation zone, which works perfectly for whales and institutions. My enhanced trading strategy lends itself rather well to this environment, so I am enjoying the element of uncertainty.
Final Thoughts
When you take into consideration the recent XRP win it becomes a lot clearer. Honestly, I expected a bigger move from XRP, at least a dollar. Furthermore, those gains have been erased, which says a lot. This is a perfect opportunity for long-term accumulation, regardless of lower levels. This might not be comprehensible for some. I take into account the stage of the market more than the price.
This is not 2022. I wrote an article some years ago, about this dynamic. Suggesting that it wasn’t 2018… and that accumulation was now on! We saw a fair amount of volatility in 2019 and even more so in 2020. However, if you did not make use of that zone you were left behind. I picked up my top-performing altcoins during the tail end of 2019 and 2020. Once again, I am not distracted or discouraged.
These are my views and are backed by conviction and a fair amount of confluence. Every investor must endeavor to conduct their own research, as well as to establish their conviction and pathway forward. As always, this should not be considered investment advice. Stay strong, and see you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
