Market History Analysis: “Sell Flooding”

A lot of people in cryptocurrencies are looking at charts every day; but never or not so often in the order books or the market history. This is a big mistake when you try to evaluate the current situation. You need to know how the actual supply/demand ratio is or let’s say how it looks like it is; because as I already wrote in an earlier article (“Why don’t give too much on buy and sell walls“) those buy and sell walls are most times not what they are looking like.

All this works because of human emotions. A 300 BTC sell wall, a wall like in GoT, will scare every new trader without experience so much that he could really think about selling – just because a fake sell wall. But there are other tactics aswell. But before I explain one of them, a little digression.

The colour red – danger!

Red at all is a warning colour. Most people know this somehow, but they might not get how deep it’s in our psych: As a kid when we play the first time with fire, hold signal on traffic lights, warning signs in general, the red card in a soccer game, usage of red in TV spots (ok, not a warning at all, but still), even in the animal world or plant kingdom you should stay away from a lot of things which are red.

Sell flooding – Pimpin’ the market history

Colour psychology is maybe not the most interesting topic on this planet – but when it comes to order books and the market history, it’s quite useful to understand directly what the impact of some tactics, to influence the emotions of other people who are watching the books, could be.

Here is an example what I mean when I sell “sell flooding”, currency LBC:

If you are watching market histories on a regulary base you will see things like this very, very often. Somebody is obviously trying to suppress the price short-term by selling small chunks of 50 LBC coins (equivalent to ~200k satoshi/15$ each) to current prices, again and again.

So he creates a “sell flood” in the market history to make people believe that it “could crash”, or what ever – and if you don’t look at the amounts which are selled you could actually believe it. Because your brain tells you “Look at all this red, it’s bad, get out!

Of course this works in both directions – green, the colour of hope 😉

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