Market retested the lower support at 1950-2000 on relatively low volume over the weekend; the liquidity was absolutely shit on Halloween day. I was outside (obviously) glancing at the orderbook, 3 points on bitfinex had a bid/ask order of 50 on both sides. I suspect market makers and bots are pushing down prices during this period of time. I am saying this not because I lost money, but because it makes sense. The market trend is down and liquidity is low are two good reason for market makers to move prices without putting up too much of a position.
Big players and most likely very experienced traders test support and resistance and see how the market reacts, then they choose a direction.
From this morning, I suspect the person who dumped multiple rounds of 1000 coins is the same as the person who short covered.
The following excerpt is from my favorite book, "Reminiscences of a stock operator" by Jesse Livermore. I posted this before. In summary, this one is about manipulators and whales trying to test the strength of the sugar market through large market buy and sell orders.
Back to Bitcoins after labor day weekend. Market sold off during the weekend, Chinese exchanges lead the way down. This is interesting because Saturdays and Sundays are times in which volumes are thin and prices are trendless. But not this week, we pushed down key supports over the long weekend. Price action trumps all, but its something interesting to think about.
Market doesn't seem like it is holding well at this level, we are going to retest previous lows of 441. In the bull's case, market needs to form a double bottom or a W shaped pattern to stop the bleeding.
Bitcoin market update:
Still in consolidation, I spotted a head and shoulder chart pattern yesterday and it broke down since. The target is 3065 on OKcoin or ~500-495 usd. I want to emphasize that all projections and patterns don't' work very well during times when volumes are low.