Analyze This: The Totems of the Crypto Market Bestiary

When talking about the features of analysis and market trends, we often mention bullish or bearish trends and moods. Why did trading trends receive such animalistic nicknames, what other beasts can be found in the market shed, and where did the whole zoo come from?

Everything began, as is often the case, in the UK. The Scottish satirist of the Enlightenment Period, John Arbuthnot, trying to ridicule the pomp and perfectionism of the British, wrote a series of five pamphlets, The Story of John Bull. The protagonist personified the Duke of Marlborough, but the image of the bull so caught on in British folklore that it became firmly associated with any wealthy Londoner.

When, in 1801, the first stock exchange opened in London, the swindlers who sold shares that they did not have became the frequenters of pubs in hopes of lowering exchange rates. Do you remember the proverb about the skin of the bear that has not yet even been caught? Thus the first “bears” appeared on the stock exchange.

Bulls and bears are the personifications of the two driving forces of the market, the buyers and the sellers. These nicknames reflect the position of the trader and their expectations about stock prices. Bulls are optimists, they believe that the prices of shares they buy will grow, and someday they will sell the assets at prices higher than they originally bought them. Bulls form the vast majority on the market (according to approximate estimates, up to 80%), they hold a long investment, and the bullish trend means a steady increase in stocks and overall welfare.

On December 15, 1989, the Italian sculptor Arturo Di Modica decided to somehow cheer up New Yorkers, saddened by the stock crash in 1987, and, under cover of night with a company of friends, brought a three-ton statue of a bull before the exchange building. The New York police did not appreciate the Christmas present and first removed the statue, but under public pressure, the bronze figure was returned to Bowling Green Park near Wall Street, and for several decades now it has been a symbol of America’s financial optimism and prosperity.

Throughout its existence, the Charging Bull has gained its own fair share of legends as it is believed that rubbing the horns, nose, or testicles of the bull (the choice depends on the desperation of your financial situation) will certainly send financial matters uphill. One may or may not believe in magical conjurations and rituals, but the historical fact remains that after the appearance of the bull opposite the New York Stock Exchange, the Dow Jones index started growing. Traders are superstitious, and today two bull statues are set in Shanghai, one on the waterfront, the other in the Shanghai Stock Exchange building; one bull appeared at the Bombay Stock Exchange (after the collapse of the Indian stock market), and one more opposite the stock exchange in Amsterdam. Curiously, after installing the bull in Bombay, traders demanded it be moved, as the animal’s horns were directed towards them, something they perceived as an ill omen.

But the market would not be a market if it showed only positive dynamics. Bears, the heirs of those who traded the “skins” 300 years ago, learned to take advantage of falling markets. When they conclude a contract for the sale of an exchange-traded asset, they fix its price, then wait until the commodity becomes cheaper, close the deal and shove the proceeds in their pocket. Bears are interested in a constant decline in prices and achieve their goals by provoking the growth of supply as they open short positions and sell until the price drops to the required level.

The constant opposition of bulls and bears is the main destabilizing factor of any financial market, and the crypto market is no exception. While the bulls moo about Bitcoin being worth $100,000 with perseverance better channeled elsewhere, the bears support rumors that cryptocurrency is nothing but a bubble that costs nothing. Their task is to devalue Bitcoin, wait for the end of the bearish trend, and buy it at the minimum price before it takes off again.

By the way, the bear was also immortalized in the form of a statue as a cast bull and a bear decorate the square opposite the stock exchange in Frankfurt am Main. Only the whales are left without a monument, although they are stronger than bulls and bears combined in the strength of their impact on the market. The whales are the largest holders of cryptocurrency. As a rule, whales watch the bull and bear games quietly, but when they wake up, they are able to turn the market upside down. Think what can happen if several hundred thousand Bitcoins are thrown on the market if one of the whales suddenly wants to say something about market relations.

The most insulting for traders is to be called pigs. But they are so keen on the idea of ​​quickly breaking the jackpot that they do not pay attention to the derogatory nickname. Pigs greedily invest in high-risk assets without studying the market and often trade against the trend. Pigs are the favorite delicacy of professional traders. There is a professional proverb: “Bulls make money, bears make money, pigs get slaughtered.”

Beginning investors looking at the crypto market with eyes full of hope earned the nickname “hamsters.” Having probed the soil, the hamsters evolve either into chickens, or cautious traders afraid of failure, and therefore often miss the right time to enter the market, or devolve into sheep. Sheep obediently follow the bulls, then the bears, depending on the current market trend. Unlike the overly cautious chickens, sheep tend to adjust to earnings on the market, but their incomes can hardly be called impressive.

In conclusion, it should be mentioned that whoever the investor in this whole market zoo considers themselves to be, they would least of all like to be branded as a moose. The term is used in Russia only, and in Russian, the word “moose” is translated as “los,” which sounds similar to the English word “loss.” “Catching a moose” means getting into a loss, losing money. Automatic closing of a loss-making position at a certain price level (stop-loss) can cut losses, but bears, bulls, and even whales are not insured against such situations, no matter how confident they feel sitting on their chests full of Bitcoins.

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