When I was relatively new to UNQL I mistook what's going on with L2 as flipping. But as I watched it more closely, I was able to identify what's really going on.
L2 is under attack by someone who goes about trading very differently than many understand, that is why it's difficult to see, and easy to mistake it as flipping, or a big seller unloading. It's neither one.
Remember, the attacker does not think the same as an investor. PPS rising is not what he wants because he wants to accumulate as much as he can, as low as he can, and that means keeping pressure on the offer regardless of PPS, so he can reload on the bids and drive it down further. He knows as well as we do it's undervalued, so it doesn't matter how low it goes while the game is on, because ultimately we all know it's going up.
The game is simple. He uses prohibitively large offers to scare people into hitting his bids. How many months, day after day has there been a constant 64k or 35k or 24k, or similar type of offer, and a nice bid there to catch the bid whacks? Then to create even more sell pressure, he will undercut his own offer with more large offers to create the illusion that there are multiple large sellers all trying to get out at once.
So what do people do? They get frustrated and hit his bids. It's the same person on the bid as the offer folks, and every bid whack are shares he uses to stack more and more offers. He's built up and inventory of shares now that he can use to easily pour water on any move, and that inventory is what allows him to reload those offers when someone decides to buy a large block with hopes of clearing him out.
It's a perpetual cycle that will not go away....until people stop hitting his bids and volume dries out all his offers. Right now there isn't a strong enough buying crowd to knock him out, and he knows this. That is why he's able to keep pushing it lower and lower. He is all about creating doubt, and it's easy to do when there is low volume and a relatively small number of buyers.
So know what you're looking at folks, understand what the mindset of the attacker is, and STOP HITTING HIS BIDS! Hitting bids will perpetuate the cycle. Buying offers and holding is what will make it more and more difficult for this situation to continue. It's a commitment. Anyone buying this to take a shot, then getting bored, or whatever, and hitting his bids is feeding the very same cycle that squeezed them out.
