How a Whale Crashed Bitcoin to Sub-$7,000 Overnight
December 17, 2019 @ 21:46 +03:00
Bitcoin lost billions of dollars worth of valuation within a 30-minutes timeframe as a Chinese cryptocurrency scammer allegedly liquidated its steal via over-the-counter markets. The initial sell-off by PlusToken caused a domino effect, causing mass liquidations. PlusToken, a fraud scheme that duped investors of more than $2bn, dumped huge bitcoin stockpiles from its anonymous accounts, according to Chainalysis.
The New York-based blockchain consultancy cited an internal investigation that showed PlusToken scammers on a systematic crypto liquidation spree. Some of them have been actively selling bitcoin since June – right after the cryptocurrency established a year-to-date high of circa $14,000. It was the same period when the Chinese authorities nabbed people suspected to have been involved with the PlusToken scam.
The latest bitcoin crash took the cryptocurrency’s rate down by close to 4 percent. The wild move downhill accompanied a sudden spike in volumes, validating an interim breakout that NewsBTC predicted in one of its analysis. Chainalysis noted that PlusToken had so far cashed out at least $185mn worth of bitcoin via OTC desks. Their cashout strategy, therefore, could have either manipulated the market dynamics directly or have indirectly changed the perception of traders towards bitcoin.
Overnight declines in the bitcoin market come at a time when investors’ appetite for haven assets is decreasing. With a more appealing stock market attracting capital, investors could ignore chartering into a widely-unregulated bitcoin industry. The presence of scammers like PlusToken highlights the issues relating to the lack of regulation of cryptocurrency firms. That being said, only a braveheart institution would expose itself to the underlying risks that come with a bitcoin investment – for now. The weight of a price reversal, therefore, falls on the traders that are already present in the cryptocurrency market.
More likely, bitcoin could continue its downtrend towards the support area of the prevailing Descending Channel (green). That would bring the price at least towards $6,500, a level that served as support during the November session.
How a Whale Crashed Bitcoin to Sub-$7,000 Overnight, NewsBTC, Dec 17