Despite the fact that the expectations of the crypto-currency market, in particular in relation to the entry of institutional investors is extremely positive, the market is in a deep bear cycle. What are the reasons for this?
The issue of market manipulation is very controversial, but it is very often discussed. The Outcry of “market manipulation” comes up mostly when the cryptocurrency market is showing extreme volatility, and within a very short time, a significant fall in prices takes place. Also, there are various theories, from whom, the price manipulation may go out. The fact is, however, that a reliable detection is difficult, if at all possible. In the past weeks and months, in particular, three actors were in the focus when it came to price manipulation: Tether, Bitcoin whales, and institutional investors want to see prior to the first entry in the market for a low purchase price.
As to Tether, there was, as we reported, even the study, which was published a few days ago. Researchers at the University of Texas want to evidence has found that USDT has been used for price manipulation Bitcoin. Using mathematical Algorithms, the study found that purchases with Tether correlated to market downturns, time and led to considerable increases of the Bitcoin prices.
Temporal correlations have also been noted by many bloggers and analysts in relation to the sale of large amounts of Bitcoin through BTC”whales”. In particular, the insolvency administrator of Mt. Gox in recent months, the focus of the media, because his sales were always in times when the Bitcoin price fell. This negative trend, the theory has been strengthened by its sales. Whether this theory is true, however, remains very questionable. Kobayashi has always denied the sales on “normal” exchanges to be made, and the price affected.
Other Bitcoin whales are far more anonymous and have to split your BTC mostly on multiple addresses. In this respect, evidence is difficult to prove that large-scale sales targeted price manipulations have taken place. The assertion that institutional investors are preparing to entry your market, sounds on the first glance, of course, also very interesting. However, the evidence is even more difficult. However, the presumption is not even remotely so. The Commodity Futures Trading Commission (CFTC) last week, big Bank JPMorgan Chase with a fine in the amount of $ 65 million, because they tried to manipulate the value of a U.S. Dollar reference index.
Another theory is that the Hacks could be a medium of choice to influence the prices of Bitcoin and Altcoins. So Bitcoin has been technically a few days ago, before a bullish breakout, as BTC stood in front of a ascending triangle pattern. This outbreak, however, was prevented by the Bithum Hack. Other similar example, there was in the past. However, this Form of market manipulation remains pure speculation.
Low Trading Volume
A rational reason for the current price falls may be the fact that the trading volume has decreased in the last two months. This decline does not signal to investors only in the short term uncertainty, but also the sideways trend of the previous months in question. The multiple crash, could thus simply be a manifestation of this trend.
Similarly, the Analyst Willy Woo saw this at the end of may, said a fall in prices of Bitcoin to $ 5,500 in advance. Woo explained that BTC is bleeding out due to the extreme volatility of the market and the low daily trading volume of BTC will probably go up to $ 5.500.
Charlie Lee, founder of Litecoin, commented, also, very critical of the lack of confidence in the crypto market, and said that the price enwticklungen for Bitcoin, Litecoin, and Ethereum of the technical developments of each project appear to be completely decoupled. Lee stated in the Interview that Hacks and other influences to the daily life of the crypto market, but not the basic foundations of Bitcoin and cryptographic currencies in question.
Regulatory measures are likely to have a large impact on the crypto market. This is due, in our view, the simple fact that crypto-currencies, such as Bitcoin and Ethereum represent a decentralized financial system, to replace the centralised, highly regulated System.
In the United States in particular, which is currently the Securities and Exchange Commission (SEC) is a driving factor, as regards the subject of regulation of ICOs and crypto-currencies. Although the SEC has stated that Bitcoin and Ethereum are not securities within the meaning of the U.S. Federal government’s laws. Nevertheless, a great deal of uncertainty about at the moment, like other ICO projects, including all ERC20 Token or which are changed on a Mainnet or (EOS, TRON, Vechain, …) or even Ripple are classified. In addition, the SEC has initiated in the past few weeks, numerous investigations against ICO projects.
In India, the Central Bank has to have applied to all banks, transactions with respect to crypto-currencies by 5. July. We, as reported, have several groups of Bitcoin and crypto-entrepreneurs petitions against the orders of the Reserve Bank of India (RBI), however, the crypto currency exchanges are preparing in the country, to stop the Fiat deposits and withdrawals. Although the ban is not new. Nevertheless, this could have led to a large Sell Off.
In Japan, crypto-currencies are not prohibited, the regulatory measures are currently but in no country are so strict as in Japan. The Japanese financial Supervisory authority (FSA) has sent in the past weeks a number of business improvement orders to various crypto-currency exchanges, as well as to the Revision of risk management required, of the anti-money laundering (AML) and Know-Your-Customer (KYC) asked. Among other things, the largest crypto-currency exchange in Japan, BitFlyer, a few days ago has announced the registration of new customers, to suspend, to revise its AML and KYC policies. The requirements to Exchanges could have contributed, in turn, have a sale.
FUD by Mainstream media
Another paralyzing factor that keeps the bitcoin price from our point of view, it is FUD and bad press. In particular, the Mainstream media use their position to spread false or exaggerated representation of the cryptocurrency market and sell to potential new investors.
Disclaimer: — trading in crypto-currencies carries a large financial risk, and can be up to a total loss of the invested capital. Coin-hero.de does not constitute investment advice and recommendation within the meaning of the securities trading act (WpHG). The website content is intended solely for the Information and entertainment of the reader. The statements made here represent only our own opinion and not a recommendation to buy. Please do your own research, before you invest in crypto-currencies. We do not accept any liability for any kind of damage. Please also read our disclaimer in the imprint. —