Why the future depends on bull whales
We’re just now coming out of a period of deflated BTC prices. Having declined somewhat steadily since the start of June, we’ve seen a reversal that’s put 50USD on the price of a bitcoin in under two weeks.
This period of decline has led to a very low volume period for most Altcoins. Despite a few stellar performances, notably from Darkcoin, the low price of BTC has drawn in buyers who have long been waiting to buy in to the relative quality of BTC. A low BTC leads then to low interest in Altcoins, with low interest resulting in high volitility.
The danger in this situation is the ease by which low volume altcoins can be hit for prolonged periods by large sell orders. When this happens traders interested in long positions run from altcoins, and head for BTC. Altcoins then tend to die of neglect shortly after.
Bear whales and bull whales
There’s second significant affect at work over the last 6 months – the battle of the Bear Whales and the Bull Whales.
Bear whales are holders of large stakes of currency eager to divest and with few scruples about how best to do this for the market. Bear whales can wipe out gains and scare off new entrants, despite claims that they can be fought off.
However, the counter to being a bear whale – being a bull whale – takes courage. These are holders of altcoins who continue to hold despite attractive exits for themselves. Rather than shift the large volumes they hold, and simply go to a beach somewhere to sleep it off, they hold the line and keep volumes, market caps and prices high enough to attract long holds.
The future viability of cryptocurrency depends far more on the number of bull whales than bear whales. Bear whales can only exit once, but a bull needs to stay bullish over a prolonged period of time. That takes courage and vision.