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102 sats \ 15 replies \ @nerd2ninja 9h \ on: Dumping a fork coin doesn't crash its price bitcoin
More volume of coins being sold than bought in a given time frame can drop the price and the price dropping can have the additional effect on the faith in the coin, but technically when the mass trading volume has taken its course, a coin can pump very high on nearly no trading volume (typically a pump and dump) or find a new audience that increases the trading volume.
I would still nonetheless as a person who doesn't have faith in a currency dump that currency onto people who do have faith in that currency, if not for profit, then for shaking their faith in that currency.
My contention is only this: selling coins does not lower the price.
More volume of coins being sold than bought in a given time frame can drop the price.
You are introducing the added element "than bought." This changes the conversation from what a trade can do, to what is happening in the whole market (or whole order book).
I agree that a change in demand for a coin certainly will affect the price. I don't agree that it follows that a trade ("coins being sold") will necessarily lead to "than bought" (a decrease in demand across the whole order book).
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How can the volume of coins sold be higher than bought? You sell a some coins without someone buying them? This doesn't make sense.
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I think he meant volume of offers vs bids. But any exchange volume could also be fixed relative to some class of buyer or seller e.g. day traders vs. long term investors (retail or institutional)
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Some of you need to buy and sell on a bid and ask based exchange and it shows.
Seeing that the people who were willing to buy at the higher price are no longer buying (ran out of volume) the sell volume must now sell at a lower price to meet the current sell volume.
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@nerd2ninja said: "Some of you need to buy and sell on a bid and ask based exchange and it shows."
What shows? I don't understand.
@nerd2ninja said: "Seeing that the people who were willing to buy at the higher price are no longer buying (ran out of volume) the sell volume must now sell at a lower price to meet the current sell volume."
I am not sure once again what you are saying. Do you count the unfilled trading orders to what you call "volume"?
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It is reflected in your comment that you have not used a bid and ask based exchange and seen the real time effects of someone getting bored of no one taking their ask and asking lower to go ahead and get out of the market, because if you had, what I'm talking about would be very obvious to you.
No you should not count the unfilled bids and asks as trading volume. We call that fake volume. Lots of exchanges stack fake volume on their exchange to give the false impression that more people are using the exchange than people actually are. So really its best to only count filled orders as actual volume, but as a person on either side of the trade, you can take a bid or an ask immediately (before the orders above and below it can shift) so to you in the moment the highest bid and the lowest ask may as well be the real (however local to that exchange) price to you.
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Hm... If you don't count unfilled orders to the volume, then what you said about the volume of coins being sold being bigger to the volume of coins being is impossible. If you sell a coin, someone else buys it. So every coin sold is simultaneously bought by the counterparty of the trade. So sold and bought coin volume is always exactly the same. No matter how the trade was accomplished.
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What's on the other side of the trade @BallLightning ?
1 coin sold for $500
1 coin sold for $495
1 coin sold for $490
1 coin sold for $480
You can do it backwards of course
$500 buys 1 coin
$495 buys 1 coin
$490 buys 1 coin
$480 buys 1 coin
There are 4 coins being bought/sold and $1965 dollars being bought/sold
If the volume of coins is greater than the volume of dollars, the price goes down. If the volume of dollars is greater than the volume of coins, the price goes up.
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Volume of dollars compared to volume of coons? This makes even less sense.
About who is in the other side? In order for you to have a sell order for one coon fulfilled, there mist exist a buy order for one coin to match. The person or entity holding the matching order is "the other side".
You always sell coins to someone. This someone is "the other side".
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This isn't a slave trade. You aren't trading people here. You're trading coins and dollars. I'm done wasting sats on you and I'm ashamed of engaging with a troll for this long
If your decision to dump "shakes their faith in that currency" does their decision to give you whatever they give you in exchange "shake your faith" in the thing they gave you?
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If the thing they gave me started dumping while the thing I gave them started pumping, then yeah I'd be pretty concerned about being wrong lmao.
But then you're arguing that dumping a fork coin doesn't dump the price, but it does given the sell volume is greater than the buy volume regardless of total supply.
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If the thing they gave me started dumping while the thing I gave them started pumping, then yeah I'd be pretty concerned about being wrong lmao.
This first requires demand in the market to change. If a thing is pumping it means people are willing to offer more to get it. If it is dumping it means people don't want it.
My point was that you can't only account for the psychology of your side of the trade. You have to think about their side too.
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I feel like I pretty clearly accounted for that when I brought up in my first comment, the importance of trading volume. Whereas your point is not made clear at all and rather seems to imply that price is determined by total supply rather than trading volume and the price is just magical and whether you sell or buy has no effect, both of which are completely and entirely false to reality.
You could say, your volume doesn't matter if the net volume is against you, but that would be wrong too because it logically separates cause and effect. You need many people to sell to change the price, but how can many people be selling, if 1 person isn't selling? Many people are made of many 1 person. So you need 1 person for many people to ever occur.
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