Is It Time for a New Cryptocurrency Trading Strategy?

The fact that we've been in an extended bear market has gotten me to the point where I've come to accept that the market that we thought we were participating in isn't exactly what we may have thought it was.  More specifically, the way it appears the market moves isn't clearly natural as a free market would or if based on broader user adoption.

As market participants, I get the sense that we want to believe that bitcoin and, to a lesser degree, altcoins move by pure market dynamics fueled by more people making more trades.  I considered the number of accounts that existed on the exchanges and I was able to hold onto the belief of a natural market that could be charted.  But it seems that we're seeing too much evidence of market manipulation for me to believe in simple market dynamics and pure TA.

At the same time, I'm not a fan of conspiracy theory nor FUD as a basis for trading.  Yes, there is a popular phrase in investing and trading of "Buy the rumor and sell the news", but know the difference is the key to that approach. 

Recently, I ran across a couple articles that make a strong case and present sensible evidence that cryptocurrency, as a market, is heavily influenced by manipulation and is not acting on pure market dynamics

I have my reasons that make me an advocate of cryptocurrencies, and you may have yours.  But, as traders, I think I'm safe in assuming that we share common goals of making profits and growing our income.  So, as traders, we must have awareness and understanding of the market we trade in and plan accordingly and realistically.

Lets begin by looking at the current market and some of the plausible reasons we're in this extended bear market.  The article in the shared link does a good job at exploring the current market and makes some strong observations.

Chief among the observations is that we need to recognize that we're actually NOT a bear market, it's a manipulated market that is being artificially depressed, currently, for the benefit of un-named manipulators.  Institutional money?  I cannot say with any certainty that it's just institutional money.  However, for myself, I was very uncomfortable with the idea of institutional money entering into crypto.  However, I accepted the argument by some that it was the large institutional investors that would take crypto, mostly bitcoin, to the next level.  Perhaps that's still possible, but I doubt that will happen as a natural market dynamic.  It will happen according to their schedule.  This is likely to leave the individual investor in the dark and lost in the wilderness in most cases.

The evidence for market manipulation is pretty strong and this Medium post goes to great depth in making the case for recognizing this manipulation.  It's a long read, but I think it's well worth it for any serious trader.

One thing the post points out is that the manipulation may have started well before the launch of futures trading that I had viewed with suspicion.  The idea that the December rally was not actually a rally driven by a robust community, but rather, an orchestrated maneuver by these manipulators. If that is indeed the case, and the evidence is compelling, it makes me a bit disappointed.

So Where Does That Leave the Individual Trader?

So now that we have the awareness and insights of this possible manipulation of cryptocurrencies, primarily bitcoin, what do we do as individual traders?

That's a question I'm exploring for my own trading and I don't have a clear response, yet.  But, in the words of G.I Joe, "knowing is half the battle".  Knowing is all well and good, but that doesn't help us much in knowing what to do as a trader.

What will be my/our strategy that takes advantage of and leverages what the manipulators are doing?

I'm approaching this with the belief that making money and growing holdings remains the purpose for the manipulation. 

"BTFD" for sure, but what else?

I would encourage us, as a community of individual traders to consider a more aggressive path towards our investing and take a more tactical approach.  It's either us against the manipulators or us with the manipulators.  But only one is a path to success for the foreseeable future.


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