Bitcoin Flash Crash Proves Whales Are Messing With Us
July 29, 2019 @ 15:01 UTC
The bitcoin price dropped almost $400 in a matter of minutes on Sunday evening before immediately paring losses. The flash crash and quick recovery is an obvious sign of bitcoin whales playing mind games. While it’s impossible to know exactly what happened, the price action looks like a classic bear trap. A handful of large players initiated a sharp selloff, luring other traders into opening short positions. The whales then immediately started buying, forcing traders to close out those positions at a loss.
It’s a game. In this volatile range between $9,000 and $13,000, the whales are initiating and capitalizing on short-term swings. The bitcoin price remains firmly below the psychological $10k barrier. The short-term trend remains bearish with most analysts still predicting a sub $9,000 bitcoin price before the long-term uptrend kicks back in. On Monday, the BTC price settled around $9,605, having fallen 30 percent from the local high of $13,785. The long-term outlook remains bullish and 30-40 percent pullbacks aren’t unusual for bitcoin, even in a bull market.
Even though the bitcoin market has evolved significantly over the last two years, a majority of BTC is owned by a small number of individuals. They can exert pressure on the markets to form patterns and lure unsuspecting traders to take their bait. As trader Josh Rager explained in a tweet last year: “Whales and Wall Street like to play mind games. One of these includes making the market extremely choppy to make it difficult to trade.”
Bitcoin Flash Crash Proves Whales Are Messing With Us, CCN, Jul 29