Crypto market: do “whales” press out weak traders?

1. BINANCE PERFORMANCE ISSUES

On Friday, Bitcoinist reported that a “lagging” issue caused widespread REKage of traders.

Binance assured traders that the issue was fixed. But that was of no compensation to those who lost thousands due to a glitch that wouldn’t allow them to exit their positions. And despite being “fixed” in record time, the problem carried on well into the weekend. Binance exchange continued to suffer from ‘performance issues’. Trades were executed without being placed, prices weren’t being displayed correctly, altcoins dumped when BTC went down… it all sounds rather chaotic. In response to these issues, CZ stated that a report was being produced on the matter and thanked his customers for their support in the meantime. And having the “heaviest traffic in crypto”, these kinds of problems can lead to a cease of trading and widespread chaos across the board–a crypto market crash even.

2. ‘FULCRUM TRADING’ EXPLOIT COULD’VE AIDED A CRYPTO CRASH

Over the weekend, TradingView’s top crypto trader, Jacob Canfield, reported that someone had exploited ‘Fulcrum trading’ and made off with $360K ETH. An opportune hacker was able to make the ETH almost instantaneously in one flash single loan transaction. Canfield seemed to believe it was most likely a manipulative act to “buy the dip”. But it could have contributed to the wider crypto market crash.

3. WHALE MANIPULATION ON SATURDAY

On the topic of manipulation, there were also signs of substantial whale movements over the last 6 days. On February 11, BTC rose 5.39% in a matter of minutes. For the next 4 days, the leading asset whipsawed and broke down briefly to the $10,100 level before correcting back to $10,400. Then, at 15:00 GMT on February 15, BTC suddenly dumped 5% in a single trade. This pattern, dubbed the ‘Bart Simpson pattern‘, is frequently regarded as an institutional manipulation pattern which is employed to shake out weak traders.

Of course, there are macro factors on top of these that may have contributed to this latest crypto market crash. Treasury Secretary Steven Mnuchin’s warning of “significant” new cryptocurrency regulations last week is hardly bullish. Frankly, it sounds more than a little ominous. Adding to the anti-crypto sentiment in the U.S., was the Department of Justice calling bitcoin mixing “a crime”. The Minneapolis Federal Reserve President Neel Kashkari also gave his 2-cents labeling cryptocurrencies “a giant garbage dumpster.” Unfavorable regulation on the horizon is never a good sign. Although, the markets failed to react at the time of the news. So, this time around, it looks more likely that it was an accumulation of inside jobs. If bitcoin fails to hold the $9,700 support level, we could see a tumble all the way back to the $8K region. Happy Monday!