RE: Some Humble analysis12 Sep 2025 14:31
Now that we understand for every algo 1 buy it creates a dumping ground for 24, lets consider why price is not going higher for a better exit average
1. Liquidity natural profile. It wont exist at higher price to offload millions of shares
2. Market dynamics: Pushing the price higher through artificial demand would require the distributor to essentially buy shares while simultaneously trying to sell a larger position
3. Information Asymmetry: Large sellers often have information advantages or urgent liquidity needs that make waiting for better prices impractical. If they're distributing due to fundamental concerns, redemption pressures, or risk management requirements, they can't afford to wait for optimal pricing conditions that may never materialise.
Algorithmic Efficiency vs. Price Optimization: Modern distribution algorithms (like TWAP, VWAP, or Implementation Shortfall strategies) are designed to minimize market impact and timing risk rather than maximize average sale price. They prioritize execution certainty over price optimization, especially in deteriorating market conditions.
Feedback Loop Effects : The very act of large-scale distribution often signals negative sentiment to other market participants, creating downward pressure that makes artificial algo price support during distribution, increasingly expensive and ultimately futile.
So you see gerbils, distribution is an art. You have to keep everyone positive within a certain zone, and not trigger something that will kill the distribution window.
This is why price distribution is topically zonal
So when will price collapse?
When the liquidity available gets to the point of a negative return on the support algo
Pull the algo - then>
Plop
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