Ripple update: Giving trading a deeper thought
Me again. I’m invested already in XRP (a little bit), looking to invest more if I can. I’ve been following the price on btcmarkets.net since Thursday and I’ve only now started noticing details I was missing earlier.
I always used to buy on a mini personal FOMO, but since the past few days BTCMarkets has been going through technical problems and I promised myself that I wouldn’t buy more until they resolved their issues.
This has been a very eye opening few days for me as I went through the emotional roller coaster but I did not buy. Each day I was scared that the price would start rising again and I would miss my window to buy more to bring my average down, but I resisted the urge to give in and have been pleasantly surprised by the dropping price. I say pleasantly surprised because I am fully convinced that XRP will rise one day, else I am ready to sink with the ship — nothing in between for me!
Moving on to trading, I now understand what a bid price is and what an ask price is. I used to only look at the current price, but now I look deeper into the buy and sell order lists. Now I also check for the volume of each order and try and determine which way the price will move and how much resistance it will encounter whilst trying to move that way.
But the more I look at it, the more it seems like the markets are driven purely based off of emotion. Let me give an example: the price is 0.4250 (AUD). Bid price is the same at 0.4250 but the ask price is 0.4324. So it’s a standoff between the buyers who are bidding the highest at 0.4250 whilst the lowest seller wants 0.4324.
Nobody is winning at the moment. Also if you look at the top 50 sell orders, you’ll find the highest sell order for 0.5360 and the price climbing fairly quickly from one order to the next. This leads me to believe that even though the price right now is pretty low, it won’t be sustainable just because there are no sell orders that low, UNLESS something happens that changes seller sentiment!
On the flip side, the lowest buyer is bidding 0.4011, which isn’t as drastic a change as the selling side, which again leads me to believe that the buyers are pretty convinced of low prices. This is why there is a standoff, buyers are convinced of low prices, sellers aren’t fully convinced of low prices.
This standoff has been pretty stable since the last 10-15 hours that I’ve been monitoring the prices, with the exception that the price is very gradually dropping. So it is still moving downwards but as I observed above, I don’t think it’s sustainable simply because the sellers aren’t fully convinced and there aren’t sell orders that low.
Now onto my main point, insert a news that hits people emotionally, whether good or bad. No mater which group it influences, that group will start to cave and the price will either move up or down depending on the news or rumour even. Influence enough people and you’ve either got yourself a bear or a bull run.
It’s crazy to see it live in action. Wanted to share with you guys. Let me know if this was helpful or if it was a complete waste of time.
About Ripple (XRP)
Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets. XRP is the fastest and most scalable digital asset today.
Don’t forget to share the post if you love it !