So here's a scheme that could be used to wildly profit in the fiat market. If you're what is considered a bitcoin "whale" holding millions worth of the currency you would just setup a short on bitcoin futures. Then you initiate a large sell from a well known whale wallet. This would trigger a large sell as stop losses are triggered. Profit then re-buy the dip.
So, free money? I welcome them to try. If anything, this would reveal the problem of trading with leverage.
There’s no guarantee that the market won’t start buying into the whale’s sell, because the market thinks the price is low. But if it works, it’s the leveraged traders who have a problem, and they deserve to be wiped out, in my opinion.
Furthermore, it’s already possible to go short on several exchanges, so if this worked like magic it would be happening right now.
Depending on what market makers are up to, this will work or won’t. Trend would be towards eventually not working if it does at all. Difficult to say how liquidity differences will affect ability of your strat to work.
