What Really Caused the Bitcoin Decline?

in bitcoin •  17 days ago

What happened? Why did we see a sudden $1000 decline in the spot price of Bitcoin from around 7.4k?

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Many commentators are pointing the finger at the inaccurate reporting of Goldman Sachs ditching plans to open a cryptocurrency trading platform, whilst in reality Goldman is just prioritizing cryptocurrency custody solutions above the trading platform, as a result of regulatory uncertainty.

Why would Goldman abandon plans for a cryptocurrency trading desk, if Binance expects to make profits of over $1 billion this year alone, despite their low fees? Wouldn’t Goldman and its shareholders want a slice of the action?

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There are also reports of a 10,000 BTC short position (approx. $74 million) being taken by an unknown trader 2 days prior to the Goldman Sachs fake news, as confirmed by the BTC/USD shorting charts on Trading View and that this could be insider trading from somebody who knew the Goldman FUD was coming.

This large short position came after somebody had moved 111,114 Bitcoins from a ‘Silk Road’ wallet that had been dormant since 2014, by using a Bitcoin mixer in a largely unsuccessful attempt to avoid the tracking of this large transaction. 11,114 Bitcoins were tracked to Bitfinex, 4,421 to Binance and 210 to Bitmex;

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Whether or not this transfer is connected to the Goldman FUD and the large-short position is unclear. It may be, as some are speculating, that the owner of this wallet is exchanging Bitcoins for a mix of privacy coins such as Monero etc, the transfer of which would avoid the need for the use of a mixer. After all, owning a privacy coin like Monero is akin to having a Swiss bank account and I can imagine a lot more individuals with money to hide will start using Monero, Zcash, etc. I wouldn’t be surprised if Bono has got some. (By the way, why doesn’t Komodo ever get mentioned as a privacy coin? And why is it so often left-out of a list of PoS coins?)

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Anyway, it seems that the decline could be in part due to a large sell-off Ethereum, by Digix, after DGD holders gave them the green-light to liquidate their Ethereum holdings. On September 5th, between 10:30AM and 11AM GMT, about 60,000 Ethereum were exchanged on Bitfinex, sending the price down from $280 to $265, followed by another 70,000 between 11 and 11:30AM GMT, causing a further decline to $260 and the market saw a correlating 4% decline in the spot price of Bitcoin from 7,3k to just under 7k.

It may simply be that Bitcoin hit a key resistance level at 7.4k, which also happens to be near to the 61.8 Fib retracement level and Bitcoin was unable to break through, causing a sell-off. The Goldman FUD no doubt helped precipitate this.

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What is a Bitcoin Mixer.png

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To maintain anonymity, Bitcoin tumbling is used to avoid tracking of transactions across Bitcoin’s public transactions log and any person’s ID connected to that address.

In order for someone to put their Bitcoins through the rinse cycle, the sender must connect to a Tor network and use a third-party Bitcoin mixing service. Some of the leading third-party providers of Bitcoin mixing are Helix, Bitcoin Blender, BitMixer, Bestmixer, Bitcoin Fog and Pay Shield. Bitcoin mixers have varying degrees of trust and reliability. There have been many instances of people losing all their Bitcoins by sending them to a service run by a scammer.

It can take a few hours to ‘clean’ the ‘dirty Bitcoins’ and fees typically range between 0.5% and 3%.

In Conclusion

What we really need is for the SEC to introduce a regulatory framework, then Goldman can open a trading desk and institutional money will really start to flow-in. What the hell’s taking them so long?

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https://atomicwallet.io/

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Sources.png
https://www.reddit.com/r/Bitcoin/comments/9ceb5v/1b_bitcoins_on_the_move_owner_transfers_100m_to/
https://www.blocktrail.com/BTC/address/15ihHoGs3onQBNnEH8afDFGvou9nD62Hm7
https://cryptalker.com/bitcoin-mixer/
https://www.trustnodes.com/2018/09/05/flash-sell-off-200000-eth-sends-price-20-250

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manipulation all the way just like everyday in crypto and stocks..

when moon ? ?

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ask @lanniebrockstein , he'll be able to tell you.

I've just recommended your post to several other people outside Steem btw.

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Thanks. Where outside Steem?

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One on Trybe, some by email and one on a intranet forum.

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I'm glad I asked, because I'd never heard of Trybe. Thanks

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Did you join? if not use my referral http://trybe.one/ref/920/ You get 100 coins for just for joining. You will also have to be quick. The airdrop for the coins is tomorrow 10th sept. You get whatever you have banked so get your own referral code and tell your circle of friends.

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All this will be a waste of time unless you have an EOS wallet of course. :P

Hoping you get the message in time

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I've already joined and left you a comment. Sorry, I didn't have your referral code.

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It's no problem I'll live. Thanks for the reSteem. Here is the Discord invite to the Trybe creators channel. Did you get the Airgrab off EOStoolkit because it will be gone tomorrow. Oh thats right and I gave you a rating on your post on Trybe too.

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Thanks, I’ll check out Discord. I don’t have an EOS wallet, all my EOS are on eToro, which was a bad move. Thanks for the upvote. 👍

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Incidentally - This article is related to you post and might be of some interest to you. it says that ICO liquidated $100m of Ethereum in the past 30 days. If this continues Ethereum will be driven into the ground and it is going to cripple the Crytosphere.

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Bloody hell! And all that Eth still to be liquidated. As, you said this ICO model is a real problem. We'll see this with EOS in time, because it's certainly going to attract a lot of ICOs.

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We'll just have to try encourage developers not to ico, Show them how it both damages them and the platform they are ICOing on.

Like any other FUD, it will fizzle out and then BTC goes back up again. Just ride the cycles folks.

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To support your work, I also upvoted your post!

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I'm staying in for the long term so rumors don't matter

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Long term won't matter if the same happens here as what happened in the late 90s in the internet world.....ie crash and consolidation. If we see a repeat it will only be projects with large war chests that survive.

Re-Steemed, to help with your promotion efforts!
-exp

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Thanks again, old bean, very good of you.

After a lot of thinking I believe that we don't necessarily need the likes of Goldman. After all the space has grown tremendously without them. Make no mistakes, Goldman doesn't pay games unless the game is in their favour. Any regulations will do exactly that. BTC was designed to escape this kind of power, not embrace it.

Of course institutional will boost the market short term, but what are the implications long term? Probably a situation the mirrors the stock market which is heavily manipulated and controlled by institutions.

Well, Uranus, Neptune, Pluto, the North Node of the Moon, and Chiron, which is to say all of the outer planets and celestial objects, are each currently in their retrograde motion.

That means five of the twelve major layers of Time in th'Earth's solar system are moving backwards. Also, it was only a few days ago when Saturn was retrograde, and only a few weeks ago when Mars was too. Neither of them have reached the "full steam ahead" part of their direct motion.

In terms of astrology that basically means that anybody trying to move forwards in regards to long-term endeavors must be like the salmon that doth swimmeth upstream. Most people and institutions do not have the stamina to do so. It is a time to retrace one's steps.

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You must be on that "good good" kush brother.

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Glad you noticed that the report regarding Goldman was not real. I don't see how it could have influenced the market anyhow as the announcement to open a trading desk had no effect on the markets when it was initially announced.

I'd say it was more than likely Digix selling off. They had been allowed to sell off 200k of Ether and they did it in a stupid manner. The initial tranche caused a mini-crash that was limited to Kraken the day before. What occurred on Bitfinex were, like you said, two sales of 60k and 70k.

Guessing that trading bots of other ico holders and whales just responded to the massive trades to make a bad situation worse. Unlike the stock markets when something like this happens the exchanges are not automatically shut down after fixed percentage drops in order to calm the market.

The ico model of raising funds has to be the dumbest method ever. Because crypto, as yet, is not that easy to spend in the fiat world it means that Ether will get converted to fiat at some point in order to pay staff and investors. If a project is crashing they will also cash in. That means every ico acts as a fiat vacuum cleaner and is destructive to the crypto markets as a whole.

Every project that raised funds from an ico will be a dead weight on crypto prices until the day that crypto is readily spendable in stores.

The Silk Road mixing was probably The NSA realising their black ops budget for this year ....hehehe, kidding.

It's to your credit you didn't do a retrospective charts analysis that "showed" a crash was "inevitable". Some people, sigh.

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Yep. I tend to favour the theory that Bitcoin hit a key resistance level at 7.4k, also near to the 61.8 fib retracement level and Bitcoin’s failure to breakthrough caused a sell-off, made worse by the ordinary trader believing that Goldman was more significant and trading bots/whales, as you say.

"What the heck is taking them so long?" Truer words were never spoken. Getting a bit frustrated myself, if this trend doesn't turn around within 6 months I'll probably take my losses and leave crypto. I can't hodl forever and my patience is limited. What do you think? When is this bear market going to die.... if ever?

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In our opinion Goldman Sachs is not to blame but we would like to add this thinking, please see our post explaining what happened: https://steemit.com/bitcoin/@bitcoin-city/is-goldman-sachs-the-reason-bitcoin-has-fallen-this-week

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We've got the Bakkt platform coming in November, which is backed by physical Bitcoins and they have confirmed that no fractional banking will be applied. We need SEC regulation and when it eventually arrives it is likely to be good for crypto, an enlightened approach in much the same way that the Clinton administration regulated the internet, in order to avoid innovation and capital flight from the US in the global Fintech race. A Bitcoin ETF will be upon us, probably in 2019, although it may come from Canada before it comes from the US. Crypto is viewed by institutions as a new asset class with the opportunity for exceptional revenue and alpha. I hesitate to offer financial advice, so let me put it another way. I'm hodling, because my nous tells me that in the long-run it will all be worthwhile, but it's going to be a bumpy ride. The good, low-hanging fruit will become more difficult to reach as time goes on and there will be many wealthy people created from digital assets, more so than the stock-market. (opinion)

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It was the Clinton administration that caused the markets to be in the mess they are today. Not strictly Clinton himself per se but Larry Summers, Robert Rubin and Sandy Weill and their involvement in dismantling Glass Steagall in order to allow the merger of Citibank and Travellers. It was this that led to the securities fraud that caused the 08 crash to happen. None of the administrations that have followed has dealt with this problem adequately either. it's been bye bye capitalism and hello plutocracy and neoFeudalism.

I think it will be necessary for the crypto world to sort its own problems out so that it can offer an alternative to the current pseudo-capitalist situation in the fiat world rather than the other way round.

It could be that you need to do a full Adam Smith invisible hand and let everything sort itself out through mutual self interest. That will allow big crashes to occur and markets sort themselves out but it will also allow bad actors with lots of "cash" to wield a lot of power when the sector is small. Mass uptake in the real world will eliminate that as their power is diluted. Another alternative would be self-regulation - that would annoy purists though - who decides who the power brokers are and how is that regulation enforced.

Ok enough of my rant..... I'll be making more enemies than friends :P

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Very interesting

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Bitcoin has dumped from $6400 to $6100. Very depressing

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The SEC has rejected 7 etfs in a row, what makes you think this Bakkt Etf will be any different?

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No, Bakkt is a cryptocurrency trading platform and it only needs approval from the CFTC, which is very likely.

https://medium.com/bakkt-blog/https-medium-com-kellyloeffler-price-discovery-f9c77885383

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you can trade crypto on coinbase, gemeni, bittrex, what the big deal with Bakkt?

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It targets institutions and offers them cold wallet storage. It's a big deal for the cryptosphere.

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Wallsteet isn’t coming. Private funds bought above $10,000 plus and will be out if we dip below 5K

Bear market lives

i am bitcoin favorite so that i have resteemit and i am following you so please give a up-vote

thanks and best regards

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i will do it

thanks for information...

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Simply put the emotional cycle brought us to these levels, this coupled with the huge amounts of manipulation in the space has just accelerated this cycle. this is just natural growth in my mind

My long term bull case is based on the inevitable entry of institutional money. Last year's bull run was a surprise fueled by mostly retail money, but it's not the big move that I see on the horizon.

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In our opinion Goldman Sachs is not to blame but we would like to add this thinking, please see our post explaining what happened: https://steemit.com/bitcoin/@bitcoin-city/is-goldman-sachs-the-reason-bitcoin-has-fallen-this-week

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Good article, thanks.

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You’re welcome

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Cierto que ha tenido una gran caída el bitcoin y que llevamos un año que desearíamos que termine ya esta tendencia bajista, pero todo se aproxima al fin de dicha tendencia y sin necesidad de ETF empezará a subir, porque al bitcoin no le hace falta ayuda para subir. Recordemos que el bitcoin vino para quedarse.
Éxitos!

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Sí, ha sido un año para olvidar, hasta ahora y dado que los futuros de Bitcoin crearon la capacidad de cortocircuitar Bitcoin, ha habido mucha presión a la baja sobre el precio. Entonces, ahora necesitamos que la SEC aclare la incertidumbre regulatoria y permita que la inversión institucional se inunde. Un ETF también agregaría validez al mercado. Éxito para ti.

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Yo ya estoy en Steemit y aquí me quedo, no necesito mas redes sociales. Muchas gracias por la información, pero también puede interesar a la gente obtener gratis una criptomoneda de PRE cada vez que accedemos a nuestro Google, facebook, YouTube, etc.... 8 monedas al día se pueden obtener TOTALMENTE GRATIS. Aquí dejo el enlace de registro, si tiene alguna duda aquí estoy para ayudarlo.
enlace de registro : https://www.presearch.org/signup?rid=313603

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Gracias, pero ya me he registrado en Presearch. Es una pena que hayas decidido no inscribirte en Trybe. Solo me uní hoy y ya tengo 452 tokens.

Manipulation is a part of all markets. It will only end when worldwide adoption of crypto happens and even then it may still happen but just with small swings.

Todo es debido a la manipulación obscena del criptomercado

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Bueno, sí. El punto realmente importante acerca de las noticias de Goldman, era que a su escritorio de criptografía se le daba menos prioridad debido a la incertidumbre regulatoria. Esto es lo que facilita la manipulación, especialmente en relación con los futuros de Bitcoin, que crean una presión a la baja sobre los precios y es lo que impide que el dinero institucional ingrese al mercado.

I hope it's not the end. I just started with the crypto!!

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Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.