Today could be referred to as a day of ‘reckoning’ in some ways. Ethereum at one point dropped to $13 a share. Some players even stated it dropping to $0.1 a share. I heard a horror story on Reddit about a guy who ended up selling 100k Ether at the worst price. Now you may wonder why people end up selling. It wasn’t because they wanted to for the most part.
How it Went Down?
All the people using margin and stop losses got wrecked. For any noobie, a stop loss means that you set a price and the broker will trigger a sell when it hits that price. The issue is when in minutes a bunch of orders get triggered. You may be the last in the queue and get the worst fill price. It is the exact reason why I don’t ever trade stop losses.
I believe the ‘whales’ of the world and algorithms work to take out stops only to buy it back up. If you just hold an asset over time you are safer in a sense. Remember that you never lose money or gain money until you clinch it and sell.
Another aspect of the day was Coinbase along with other exchanges going down. The Ethereum network was having trouble and my belief is that the status ICO slowed things down yesterday. However, everything is now back to functioning and price is going back up.
If you were to close your eyes at the beginning of the day and open them now you would have barely noticed a price change. It pays to be a long term investor. Keep in mind that the issue was due to popularity and heavy volume on the Ethereum network. It wasn’t due to issues in the fundamentals. Welp here is a cheers to the ‘hodlers’.
Stay golden pony boy!