Is this what they call 'Painting the Tape'?

[MatTheCat]

Once again, BTC is moved by the Chinese exchanges, with OKCoin registering a whopping 750K BTC volume on the 4hr break out candle. However, lets zoom in a little:





Seems that 93% of that volume, occurred with Bitcoin still in it's 'rangebound' state, between 2800 CNY and 2830 CNY. Note also, that market structure was bearish on the run up to the break out. Anyone who has traded on the CNY exchanges, will be familar with 500 or so CNY walls, lying +/- 10 CNY of spot, only for a handful of orders for several hundred of BTC to appear and be executed just as quickly, totalling perhaps 3K BTC in volume, but for spot price to stay within a 5 CNY range. When this happens, this is basically 'Front Running' trades, where some trader, or perhaps the exchange itself, sells large sums of Bitcoins to himself, so quickly, that normal traders don't get access to the trade orders. This is what basically happened here. It is called 'Painting the Tape, it is highly manipulative, and also highly illegal in regulated markets'. The charts give the impression of HUGE interest in BTC at the 2800-2830 CNY price range, and the 'bullish breakout' occurs, with around 6% of the total break out volume, accounting for over 75% of the move up.

This market, is basically a bitch to those who are behind the big Chinese exchanges. It is so obviously, manipulated and corrupt, but it don't matter, the USD exchanges follow suit everytime, and real fortunes are won and lost.

[RyNinDaCleM]

Once again, BTC is moved by the Chinese exchanges, with OKCoin registering a whopping 750K BTC volume on the 4hr break out candle. However, lets zoom in a little:





Seems that 93% of that volume, occurred with Bitcoin still in it's 'rangebound' state, between 2800 CNY and 2830 CNY. Note also, that market structure was bearish on the run up to the break out. Anyone who has traded on the CNY exchanges, will be familar with 500 or so CNY walls, lying +/- 10 CNY of spot, only for a handful of orders for several hundred of BTC to appear and be executed just as quickly, totalling perhaps 3K BTC in volume, but for spot price to stay within a 5 CNY range. When this happens, this is basically 'Front Running' trades, where some trader, or perhaps the exchange itself, sells large sums of Bitcoins to himself, so quickly, that normal traders don't get access to the trade orders. This is what basically happened here. It is called 'Painting the Tape, it is highly manipulative, and also highly illegal in regulated markets'. The charts give the impression of HUGE interest in BTC at the 2800-2830 CNY price range, and the 'bullish breakout' occurs, with around 6% of the total break out volume, accounting for over 75% of the move up.

This market, is basically a bitch to those who are behind the big Chinese exchanges. It is so obviously, manipulated and corrupt, but it don't matter, the USD exchanges follow suit everytime, and real fortunes are won and lost.

I cannot agree more! This is what my volume indicator caught
Disregard the rest of the fake volume and focus on the red indicator at the bottom. My indicator (BADV) goes positive when there is more buying at market than selling (There are some other calculations in there, but that is the gist). It goes negative when more selling. BADV plummets during the rise, which means there was net selling during that candle. The gray vertical line is just there to show that one bar earlier, BADV was making a peak.


Only in china can the price rise on sell volume.

[RackRackCityBitcoin]

China use fake Bitcoin?

[MatTheCat]

China use fake Bitcoin?

Fake Volume.

If I have 500 BTC, and only 500 BTC, but have fast access to Huobi's servers, I can generate 100K BTC of volume within 5 mins by rapidly selling that 500 BTC back and forth, between different accounts that I control, and with 0% trading fees, this doesn't cost me anything except the energy in my finger to press the 'START' tab on my trading bot.

But this isn't some joker ramping volume just for fun. This is a calculated Paint the Tape and then ramp, on the back of some Shock Financial news in China....and you know what, hasn't it 100% fucking worked a treat?

All the USD exchanges have followed, naturally, we now have 'bullish' market structure which will suggest to many traders that Bitcoin is set to break out to new highs. Bitcoin could go up a fair bit from here, 'all on it's own', but when the organic buying pressure runs out of steam, perhaps then comes the dump?

[Kisleav]

Are their fake bitcoins

[rokkyroad]

Are their fake bitcoins

Yes. They are called bitcoin XT.

[RyNinDaCleM]

China use fake Bitcoin?

Fake Volume.

If I have 500 BTC, and only 500 BTC, but have fast access to Huobi's servers, I can generate 100K BTC of volume within 5 mins by rapidly selling that 500 BTC back and forth, between different accounts that I control, and with 0% trading fees, this doesn't cost me anything except the energy in my finger to press the 'START' tab on my trading bot.

But this isn't some joker ramping volume just for fun. This is a calculated Paint the Tape and then ramp, on the back of some Shock Financial news in China....and you know what, hasn't it 100% fucking worked a treat?

All the USD exchanges have followed, naturally, we now have 'bullish' market structure which will suggest to many traders that Bitcoin is set to break out to new highs. Bitcoin could go up a fair bit from here, 'all on it's own', but when the organic buying pressure runs out of steam, perhaps then comes the dump?

What he said...

It gives the appearance of a well supported price and increased demand. Since they know that people are oblivious to it, and blindly follow "the leader", they can fleece the sheep.
If you look closely at the chart I posted, most of the large spikes in volume produce little to no price movement. This should not be the case. Add to that their ability to turn over nearly 1/21 of all bitcoins that will ever be, every single day. If that doesn't raise flags then this market is worse off than I ever expected.

[Kisleav]

Are their fake bitcoins

Yes. They are called bitcoin XT.

I had never had about them.

[NorrisK]

If history repeates itself we will likely see some more of these fast rises in the next week.

Will be interesting for sure. Especially since we are aware of what is likely happning, you are already 10 steps ahead of poor new investors.

[Cheap Ass]

Are their fake bitcoins

Yes. They are called bitcoin XT.

I had never had about them.

Yeah me neither what's a fake bitcoin?

[Amph]

Are their fake bitcoins

Yes. They are called bitcoin XT.

I had never had about them.

Yeah me neither what's a fake bitcoin?

is a wannabe bitcoin, a supposed fork that want to overcome some consensus rules, by establishing a dictatorial regime

forget about XT, there is no XT, was a jimmick move to centralize bitcoin more toward some dev...

[oda.krell]

Is this an instance of (volume) tape painting on the CNY exchanges? Quite possibly. Does it matter? Depends on your perspective.

I'm pretty sure the MMM scam has been a factor in recent months - maybe not the only one, but at least one relevant factor. Did it matter for the trend to $500?

The nature of Willy has never been fully determined in my opinion, ranging somewhere between 'problematic' and 'outright scamm-y'. Didn't matter either for the $1200 ATH.

I'm not a big believer in the distinction between 'painted' and 'real' -- I'm not saying the difference doesn't exist, but it's just another factor to consider in interpreting the price/volume data.

And all that said, whether the current breakout is manufactured or not, we've had some pretty good signs for the likely depth of the retrace since late December, I'd say.

(EDIT) That said: solid post, OP. Appreciate it a lot, even if I perhaps draw different conclusions.

[MatTheCat]

I'm not a big believer in the distinction between 'painted' and 'real'

So you think that there is not a great distinction between volume that is generated by essentially just one, or a very few pairs of hands, working in cahoots, playing high frequency pass the parcel between accounts which they control, with bundles of BTC, in order to create a false impression of massive interest and/or support in BTC, at a certain level, and volume generated by a flood of interest in BTC; with a great number of individual seperate market players, coming rushing to the exchanges to buy BTC, where, it just so happens, there is also a glut of individuals looking to offload BTC, only for trhe bulls to win in dramatic fashion?

C'mon. Surely there is a massive difference between painted and real volume, and what each of those characteristics tell us about the condition of the market we are playing in? Sure, the interim result may be the same. Bitcoin jumped up $30 today, in a very short space of time. Had you bought 10 BTC today at $430, sell now, and you have made $250 profit! Awesome! But the difference between a bull market being driven by Tape Painters, and one being driven by organic volume, is that in the circumstances of the former, the whole market essentially relies upon the whims of what the Tape Painters want to do next, and that is a very precarious and dangerous situation, for all other market participants.

Did 'they' bring Bitcoin up into this zone, simply so that they could sell wholesale BTC to retail buyers, and then short the fuck out of it, relying on retail sellers to replenish 'them' with wholesale priced Bitcoin way back down below? Or do 'they' have the intention of now sending Bitcoin through it's previous high and up towards dizzying new heights? Can TA studies tell us anything about what 'they' intend to do next, when it is 'they' who have manipulated the condition of so many technical indicators in the first place and 'they' can have the market basically lie to us about what 'they' are going to do next with it?

I think the difference between a largely organic market, and one that his strung to relatively few powerful hands, is massive, and don't understand how anyone could fail to see an important distinction
here.

[DieJohnny]

Smart money buys before everyone else, could be also an explanation....

[MatTheCat]

Smart money buys before everyone else, could be also an explanation....

And that is the game 'they' are playing.

For those that use Volume Profiling, 'they' have created a new Point of Control, right in that 2800-2830 region.

A naive technician, not savvy to the shenanigans of the Chinese Bitcoin Cowboys, would look at BTCs Volume Profile histogram for the recent session, and conclude that:

• 'Smart Money' bought BTC at this price range hand over fist
• there is huge support for Bitcoin at 2800-2830
• that 2800-2830 is fair value for Bitcoin
• that any price below this, is undervalued

But if 90% of the volume behind the newly established PoC, is nothing but a croc of shite, then so to are these conclusions. At best, the Chinese Bitcoin Cowboys are manipulating the market, in a way which honestly states their intentions on how they are going to take the market forward. But what happens if 'they' are quite intentionally, seeking to fool the market?

[finder_keeper]

Are their fake bitcoins

Yes. They are called bitcoin XT.

Please do not mention Bitcoin XT on bitcointalk.org. Promoting Bitcoin XT is considered (by the owner of bitcointalk.org) to be an endorsement of an altcoin, because XT implements large block size against the wishes of core devs, only considering the vote of 75% of miners, wallets, exchanges etc.

[brg444]

I see you bears are getting desperate  

Instead, try and listen to what the market is telling you and right now, the market is screaming 'CORRECTION'.

 

[oda.krell]

@Mat

Please do me the favor of reading (and understanding) the argument I actually made - I did the same with yours.

When I say "not a big believer in the distinction...", I mean: for the purpose of trading, not that the two types are actually the same. I also gave more than one example of where I believe similar (non-organic, if you want) buying pressure led to pretty impressive trends as well.

I'll boil my argument down further: your observation is perhaps correct, but what do you make of it? Would you suggest to sell right now, expecting a complete trend reversal? Not very likely, right.

So, all I'm trying to get at is that you need a tradeable interpretation to go with your observation of painted volume, otherwise it's not that helpful.

[abs350]

Matt...

You're right about this sure but you know what it is?? Something called algorithms.  

This kind of thing happens in all forex markets not just in Bitcoin. Its high frequency trading related and its all done by computer algorithms. Since around 2014 it has been happening now in bitcoin. I can only guess it is the same algo traders have now added bitcoin to one of their markets but this is nothing specific to bitcoin. It's just computer algorithms manipulating the market with short term manipulations. I speculate that alot of these algo's have super short term holding periods of just a couple days, they will buy silently on the order book and when they see the market is ready to move they will execute massive pumps. Then sometimes they will dump almost immediately after.

All speculation but...... who knows? One things for sure it is an identical thing going on in the forex markets.  So its not anything related to the exchanges or the bitcoin ecosystem. If you do some research into the forex markets (and look on other trading forums specially algo trading) you will see exactly the same thing going on.

[oda.krell]

Here's a quick follow-up observation. OKC BTCCNY vs. BTCUSD weekly Futures, 5 minutes:





Arguably, weekly futures on OKC is where most of the action is happening nowadays, by volume, and maybe by impact as well. And here, the volume pattern you noticed doesn't hold.

Which doesn't contradict your 'painting' hypothesis, but it does mean this isn't a case of "Chinese exchanges fleecing the West", but if at all, a particular operator fleecing everyone else, OKC Futures traders included.