BTC - Curious what's causing the recent price drop?
Bitcoin tanked hard yesterday, and so far hasn't shown many signs of turning around yet
Bitcoin broke through a key support level yesterday by falling below $7k.
This likely triggered some stop loss selling, which also exacerbated the move.
But what started all the selling?
That likely had something to do with the PlusToken scam.
As I posted yesterday, that scam netted something like $2.9 billion and some of that has been making its way out into the markets.
https://steemit.com/bitcoin/@jrcornel/btc-price-tanks-but-whales-appear-to-be-buying-the-dip
In fact it likely has been responsible for much of this decline that started after bitcoin hit $14k this last summer.
It was likely no coincidence that bitcoin peaked on the same day that the founders of PlusToken were arrested in China.
The decline due to the PlusToken scam unwind?
On chain analysis done by Chainalysis shows a correlation between coins originating from PlusToken being sent to OTC brokers around the same time of bitcoin price drops.
Check it out:
(Source: https://thenextweb.com/hardfork/2019/12/17/bitcoin-cryptocurrency-price-dump-ponzi-scheme-plustoken/)
Keep in mind this is just the coins that are being sent to OTC brokers.
Much of the coins have gone through mixers to obfuscate their origins and likely made their way to exchanges as well.
So, why yesterday?
It was interesting in that the news only started really getting pushed out there about PlusToken suspects dumping coins beginning yesterday...
My guess is that the scammers started to realize that the more this gets talked about the more likely they are to get caught so they panicked a bit and started trying to sell everything they could before they got caught.
This is evidenced by the fact much of their ill gotten gains was in bitcoin AND ether, and interestingly enough it was ether selling that kick started things yesterday.
Large sells starting going off in ether minutes before the bitcoin selling began.
Hmmm.....
(Source: https://twitter.com/HsakaTrades/status/1206644916035538947)
Hopefully the selling is mostly done at this point, though it's tough to say for sure.
I know from what I read yesterday that at least half of the known ill gotten gains had already been sold, meaning that left, at most, the other half, most of which has now moved in the past 24 hours.
Here's to hoping for some reprieve!
Stay informed my friends.
-Doc
Longs are still climbing by the way...
Yep... hopefully that means this dump is just a temporary setback.
EMA40 is getting closer and closer, but it will still take about a month... After that the price should start climbing... We should see similar peaks as around January 15th, 2018.
On bitcoin or altcoins?
Bitcoin
Damn scammers, there's too many of them, especially involving cryptocurrencies. It's unfortunate that these schemes still exist, but hopefully something large like PlusToken will be the last of the breed. That said, I've seen some reports (maybe the same ones you've went through), stating that the larger portion of their scam money have already been unwound. So, let's hope this eases soon, otherwise we could retest the $6,500 lows.
True, though these types of Ponzi Schemes exist everywhere. It just seems to be more common in crypto right now.
Cryptocurrencies attract people who are not familiar enough with known scams and fall for promises... As all important exchange rates have tanked for almost 2 years, people are willing to take more risks.
Yes, there is that as well.
Merci, for the update.
Sure.
Could be the fact that volume traders make more earnings by pump/dump maneuvers than they ever will with a steadily increasing price?
Volatility is good for trader, specially with the diverse short/future tools that are available now...
Yes there is always an incentive for exchanges to want to move the price... a conflict of interest of sorts.
I heard it also caused the huge run up to 14k 😀
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Yep, it was likely part of it as well. People bought bitcoin to get in on those returns.
It's sad that the world is full of scammers. Only good thing about it is that we have to keep our eyes open and think critically!
Nice to meet you @jrcornel, I'm BOI, the new kid in the Blog Town.
Have an amazing day (whoever is reading this right now)!
Yep, and it is getting harder and harder to pull of these sorts of scams. The space is getting cleaned up little by little.