[2018-06-11]Bitcoin Price Crash Caused by Panic Sellers and Manipulation

[Diabolov]

In an effort to pin Bitcoin’s price drop on anything other than sellers overpowering buyers, mainstream and cryptocurrency-focused media have been eager to blame Coinrail — an irrelevant and incredibly minor cryptocurrency exchange in South Korea. However, the hack of Coinrail is not to blame for the flash crash. Market manipulators and panic sellers are.
Panic Selling

After a prolonged period of sideways trading, market makers in the cryptocurrency space decided to slice a $42 billion chunk off the total market capitalization over the weekend. Bitcoin is now down more than 50 percent on the year.

The vast majority of mainstream and cryptocurrency-focused media has pinned the collapse on the low-profile hack of Coinrail — a borderline irrelevant exchange ranked 90th by trade volume that most readers had never previously heard of.

Coinrail is not to blame. Panic sellers are.

Stephen Innes, head of Asia Pacific trading at Oanda Corp. in Singapore, agrees, telling Bloomberg:

    This is ‘If it can happen to A, it can happen to B and it can happen to C,’ then people panic because someone is selling. The markets are so thinly traded, primarily by retail accounts, that these guys can get really scared out of positions. It actually doesn’t take a lot of money to move the market significantly.

Low liquidity is indeed one of the cryptocurrency market’s biggest problems, as it allows as little as one account to dramatically manipulate the price of bitcoin, or other cryptocurrencies, by throwing around 1000 BTC, sparking a wave of panic selling from individuals who honestly believe there has been some fundamental change in the cryptocurrency itself.

No Buyers

More likely than not, the current decline in Bitcoin’s price is merely a move from unchecked market manipulators who can, for all intents and purposes, drive down the price at the push of a button. Those same accounts can easily drive it right back up — as seen on April 12, when the price of bitcoin shot up over $1000 in the blink of an eye.

Meanwhile, a trip to the r/CryptoCurrency subreddit on popular social media website Reddit indeed shows mass despair as more and more traders get shaken out of the market.

One post from u/shootermgavin_crypto titled “I’m Done” reads:

    24/7 Market

    70% down….

    It’s been emotional ladies and germans but I am officially tapping out.

    Will leave 5k in this sh!tshow and see where it goes but the trading…no more, can’t do it. Don’t have the emotional fortitude.

    God speed sailors

u/shootermgavin_crypto isn’t alone. With each manipulative red candle, big-money investors continue to explore just how low they can buy bitcoin while retail traders lose all hope.

http://bitcoinist.com/bitcoin-price-panic-sellers-manipulation-coinrail/

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[alex_gr_cc]

The cryptocurrency market lacks liquidity. Every negative news, this is an excuse for lowering prices, as buyers no longer become. In addition, it still coincided with the summer period, when the market had to fall. Many in this period go into profit. I suppose that bitcoin will be on the outskirts at this level all summer long. We are waiting for autumn.

[IconFirm]

Here's what I think.

Coinbase, Kraken, itBit, and Bitstamp are being investigated by US Commodity Futures Trading Commission for fake volume. They & every other centralized exchange are now shitting their pants & dumping to the actual "real" level in an effort to hide their manipulation.

All those who were shouting for big players & banks to get involved in Crypto are probably feeling pretty dumb right now. This is what happens when these types of players get involved - corruption & manipulation, look at what's happened at Poloniex since Goldman Sachs backed Circle took over, it's the tip of the iceberg. I think Bitcoin is still over priced, but it might not be soon.

I'll be happy if all centralized exchanges got shut down, it would keep the greedy filth out of crypto & Bitcoin would be stronger for it.

[richardsNY]

I'll be happy if all centralized exchanges got shut down, it would keep the greedy filth out of crypto & Bitcoin would be stronger for it.

Your ideal Bitcoin world picture isn't viable. On top of that, you shouldn't care about what others are doing with their coins. It only matters what YOU do with them. Whales will use anything in their advantage to make it seem like certain regulatory actions are causing the price to go down. People panic over something that isn't worth panicking over. Instead, people should use this as an opportunity to scoop up some coins, or have it be an expensive lesson in the way that buying coins during hypes is not the right thing to do. If something goes up quick and hard, it comes down as hard or even harder.

[IconFirm]

I'll be happy if all centralized exchanges got shut down, it would keep the greedy filth out of crypto & Bitcoin would be stronger for it.

Your ideal Bitcoin world picture isn't viable.

It's perfectly viable. Centralized exchanges go against the core idea of Bitcoin. It's decentralized by design & for a reason - to rid us of these centralized weak points & all the problems that are involved in centralization.

[richardsNY]

It's perfectly viable. Centralized exchanges go against the core idea of Bitcoin. It's decentralized by design & for a reason - to rid us of these centralized weak points & all the problems that are involved in centralization.

Ok, so you are willing to get rid of the centralized ecosystem and make Bitcoin worth just a few hundred bucks? It will directly result in the network to become less attractive to mine on. Do you know that forcing people to use Bitcoin in a specific way is also a single point of failure? It closely replicates what Roger Ver is doing with his BCash. Nothing is against Bitcoin if you choose to use it in a specific way. Creating infrastructure around Bitcoin adds to its utility value, which is what made Bitcoin what it is today....

[IconFirm]

It's perfectly viable. Centralized exchanges go against the core idea of Bitcoin. It's decentralized by design & for a reason - to rid us of these centralized weak points & all the problems that are involved in centralization.

Ok, so you are willing to get rid of the centralized ecosystem and make Bitcoin worth just a few hundred bucks? It will directly result in the network to become less attractive to mine on. Do you know that forcing people to use Bitcoin in a specific way is also a single point of failure? It closely replicates what Roger Ver is doing with his BCash. Nothing is against Bitcoin if you choose to use it in a specific way. Creating infrastructure around Bitcoin adds to its utility value, which is what made Bitcoin what it is today....

No, decentralized exchanges will & should be the norm. Bitcoin was not designed as a way to make money, that's just a temporary off-shoot - it was designed as a replacement for money. In a few years all money will be digitized & we'll be laughing about walking around with worthless pieces of paper with numbers printed on them. Bitcoin has given us the choice of having a decentralized digital currency system controlled by the users instead of one that is centralized & controlled by the few.

Suggest you read the white paper:  https://bitcoin.org/en/bitcoin-paper

[Kprawn]

It's perfectly viable. Centralized exchanges go against the core idea of Bitcoin. It's decentralized by design & for a reason - to rid us of these centralized weak points & all the problems that are involved in centralization.

Ok, so you are willing to get rid of the centralized ecosystem and make Bitcoin worth just a few hundred bucks? It will directly result in the network to become less attractive to mine on. Do you know that forcing people to use Bitcoin in a specific way is also a single point of failure? It closely replicates what Roger Ver is doing with his BCash. Nothing is against Bitcoin if you choose to use it in a specific way. Creating infrastructure around Bitcoin adds to its utility value, which is what made Bitcoin what it is today....

No, decentralized exchanges will & should be the norm. Bitcoin was not designed as a way to make money, that's just a temporary off-shoot - it was designed as a replacement for money. In a few years all money will be digitized & we'll be laughing about walking around with worthless pieces of paper with numbers printed on them. Bitcoin has given us the choice of having a decentralized digital currency system controlled by the users instead of one that is centralized & controlled by the few.

Suggest you read the white paper:  https://bitcoin.org/en/bitcoin-paper

Agreed, but decentralized exchanges are not as good as centralized exchanges to garner the support from governments and

also Banks. These entities want to control this experiment and the way to do this, is for them to implement all these

KYC/AML regulations onto these centralized exchanges. So where Fiat is the onramp, you will have to deal with these

regulations.    The moment when they lose that power, they will start using the ban hammer on this technology. 

[IconFirm]

Agreed, but decentralized exchanges are not as good as centralized exchanges..

Yet. New decentralized exchange platforms are being developed & improved every week, some have been up & running for a while. Volume is the issue, but more users = more volume. Is it "good" that centralized exchanges disappear with users funds, or lock them out & demand payment or ID, or get hacked, or manipulate prices for their own gain, or provide shit support, or ignore support tickets, or run bots, or charge extortionate fees, etc, etc?

...to garner the support from governments and also Banks.

Again, Bitcoin was designed to not need governments & banks. That's the whole point of it. They're not required.

These entities want to control this experiment and the way to do this, is for them to implement all these
KYC/AML regulations onto these centralized exchanges. So where Fiat is the onramp, you will have to deal with these
regulations.

Exactly. This is why we should get rid of them. Stop using them.

The moment when they lose that power, they will start using the ban hammer on this technology.

Didn't they try that the last few years already? How did that work out? A truly decentralized system can't be stopped - that's my whole point. By utilizing centralization in anything you are handing over control, a point of failure. That's why your beloved governments & banks are trying to control the centralized exchanges. Get rid of them & you get the control back. That's Bitcoin. By design.

People have become so obsessed by fiat prices that they've completely forgotten what the point of Bitcoin was. It's sad.

[timerland]

Panic sellers and manipulators could be a potential cause of this dump.

However, wouldn't the main reason still be the fact that bitcoin's price cycle is currently simply in a bearish state instead of a bullish one? The 2017 pumps have simply been too big to be sustainable in the long run (bull market), and what follows is always a correction, which is happening right now.

Nobody dares buying right now even though prices are so low for the same reason - sentiment in the market is bearish.

Manipulation can definitely be a reason though, which is why I don't think that trading bitcoin derivatives is a good idea at all. Hold the real thing.

A truly decentralized system can't be stopped - that's my whole point. By utilizing centralization in anything you are handing over control, a point of failure. That's why your beloved governments & banks are trying to control the centralized exchanges. Get rid of them & you get the control back. That's Bitcoin. By design.

Well said.