Average Joe - Bitcoin anyone?

I recently published a post about the "Wall Street cheat sheet"

You can see this play out even over the smaller TF's per Elliott wave cycle. It's all to do with the market sentiment and traders psychology.

Us humans, try and find patterns in everything. Whales in the clouds, levels on the charts, even faces in coffee. What you have to appreciate is why these emerge, there's no voodoo or mythical reasoning behind such things. It's often just humans trying to make sense of something the brain fails to understand. I have put together several posts over the last 18 months, some to do with calls up and down, back up again and then down. But that's not the point, the real value is for traders to come to these conclusions on their own.

Many of my educational posts can be found throughout my profile here on Tradingview.

Some of relevance -

The Simpsons one, was all about this Wall Street cheat sheet and digging a little deeper into the emotions.

I also talked about why the masses have come to crypto;

When you start to piece this together, you will quickly realise - that the larger operators in the market, simply understand the psychology which is driven by retail sentiment.

This particular post was all about why I was calling the rocket call - whilst the majority wanted it to be re-accumulation, there was some obvious signs showing distribution had began. Ask yourself this, when the big boys sell - who are they selling to? Well retail mostly, when the big boys buy - again, who do they buy from? well retail mostly.

These patterns are nothing but humans being human. They won't change much, even being over 100 years old. Humans haven't changed much in 100 years.

You can see these cycles play out, every step of the way - you can and some will say in the comments "your wrong, we are at this stage or another" Your missing the point, I am not trying to pick bottoms or tops with this post; I'm merely educating the masses as to why these things exist.

Take a look at the rally up in Bitcoin's early life;

This was the tech kids, the true believers and not until prices hit over 1k did you see many VC's or larger scale "tech investors" join the ride. (NOT TRADERS or TRADING INSTITUTES) not at this stage, the drop down is where the big boys played accumulation to perfection.

This came just after, every man and his dog had heard about Bitcoin from the postman or in the local pub-bar.

Of course as it happened - jumped in at the local top, got angry and annoyed. Sold off what was left to - you guessed it, the big boys accumulating!

As the rally played out, retail seem to always want "NO RISK" so they end up buying when the price is rising. Now it was more widespread, all over social media! We saw influencers call 130K, $250k, a MILLION dollars and even 3 Million dollars! buying it above 45k made sense to many who either did not understand or unwilling to learn.


Many went for it, leaving the bags red for an extended period of time. To make it worse, the larger operators can afford to sit and wait, wait and wait some more. Retail will leave due to fear, take losses as every day they switch on the computer - the account is negative. People have literally gone all in on this and in some cases - buying the top!


The longer the low ball phase goes on, the more uncertainty it will cause. Fear of this going lower will eat away, especially for those carrying heavy losses. (I've heard people say things like "it's only a loss if you sell") All people want is for the pain to be over and for this to hit all time highs. At the moment, people are questioning crypto - regulators are edging closer - especially after the whole FTX saga. The crowd cries "banks are bad, governments steal" the issue is banks are regulated to ensure low fees and options to return stolen funds. In an unregulated market - some will get burnt!

Now, don't get me wrong - I'm not one for governments or banks. But crypto needs to establish a good regulatory footing for it's value to be realised properly.

Until then we are likely going to see us sat somewhere in-between denial and depression on our Wall Street cheat sheet.



Have a great week all!



Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.