Both positioning and market expectations dig into a bigger concept of reflexivity within financial markets, as pioneered by George Soros. In short, market reflexivity suggests that investor perceptions and behavior impact market conditions, which, in turn, impact and shape investor beliefs and actions. This circular, self-referential feedback loop leads to non-linear market dynamics as cognitive biases and expectations build on each other to impact market prices and investor positioning. This can explain the emergence of price trends that can become self-fulfilling over the short run and self-correcting over the longer term as traders chase prices until expectations and positioning for continued price moves can only result in a reversal and correction, much to the disappointment of traders who recently started following the trend.
Related posts
-
Binance Issues Statement, Denies Involvement in $230,000,000 Hack of Crypto Exchange WazirX
The world’s leading cryptocurrency exchange by trading volume is distancing itself from a cyberattack that recently... -
Bitcoin (BTC) Price Up 5% to $61K Ahead of Fed, but Binance Order Books Suggest Rally Could Be Capped
The dynamics are not necessarily that straightforward, as the prospect of larger cuts could cause a... -
Binance Top Traders Go Short On Bitcoin At $60,000, What’s Going On?
Este artículo también está disponible en español. Crypto analyst Ali Martinez has revealed the bearish sentiment...