A Lesson From George Soros Amid Binance and Coinbase Accusations

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.