Last bullrun in 2017, people gave all these stupid explainations about why the market was crashing or pumping. First, people were telling here that ‘Wallstreet bonuses’ were going to cause a massive pump. However, when the time was there, the market crashed. After the market crashed, this echo-chamber was telling itself that this was because people were getting their money out for Chinese new year. Please note that this was only AFTER the market already crashed.
Today, I see a similar sentiment. People are agreeing that margin accounts on binance are causing the crash. Now, I do understand that margin accounts are accelerating a downward trend, but I do not agree that they caused the crash.
The truth is, this market is irrational on the short term. No one can predict or understand how the future price movement will be. The best thing we can do, is look at the past price movement and see if we can quantify this behavior. Some models have been succesful at this point, such as PlanB’s Stock2Flow model. Now, I won’t go into detail in what this model entails, but I strongly recommend to educate yourself on the S2F model and similar models, which can be found on www.lookintobitcoin.com.
I hope more people will understand that one single event will not cause the market to crash. These ‘crashes’ are totally explainable by the normal price fluctuation BTC is going through. Seeing a crash in price and trying to explain this with some argument is just an easy way to comfort yourself, do not fall for it. It’s like stating the earth is flat and finding your arguments to support this claim.