Are bitcoin exchange prices being manipulated?

[RenegadeMan]

So, as many of you would have noticed, over the last few days the BTC price has been probably more stable than it's been for a long time. Movements across a single day on Bitstamp over the past 24-48 hours have been in the $20 to $30 dollar range. However what's happening is the price is doing a very slow dance downwards; almost like a leaky tire slowly deflating. Perhaps there just isn't anything of note happening to create any demand and the bubble's slowly going down. The price stability provides better conditions for Bitcoin to be a genuine currency that can start to be used more, but if it's just slowly deflating it's not going to be something people will be willing to hold onto.

Anyhow....while watching the price movements on Bitstamp for the past few hours I was sitting there willing it to get above US$630 (a useless practise, I know) and there appeared to be this battle going on with transactions of BTC going through at $628.04 and then other sets of transactions coming through at $629.79. It was going back and forth between these two numbers. Looking at the $628.04 transaction and the number of BTC being sold each time, one can calculate that these are lots of US$100. The other transactions at $629.79 (and other amounts close to this) were for all differing amount of BTC.

I watched this dance for an hour or so, the whole time wondering why transactions are occurring at the lower figure when the higher figure seemed to be 'market rate' at that moment. These $100 dollars transactions just kept coming and coming. Eventually they outnumbered the higher trades and then the higher trade price started to come down and the lower one slipped down a cent to $628.03 (and eventually below $628). I must have counted hundreds of these trades at a bit over $1.50 less than all the other trades. They just kept coming at an ever increasing rate.

What does everyone think about this? Is it just normal market dynamics within an exchange or is there some robot process (or even a human pressing buttons) selling $100 of BTC every few seconds at circa $1.50 below all other trades in an attempt to get the price down? One can imagine someone within the exchange who can just keep using the same $100 wanting to create a price collapse so that when it bottoms out they can quickly buy up vast quantities of BTC and make a killing when it bounces. Possibility?

(and before anyone questions my credibility given this is my first posting on here, I've been reading posts on this forum for a long time and have been involved in Bitcoin for over a year, but have never wanted to comment or engage. I haven't seen anyone else ask this question about pricing on exchanges, especially given all the focus on much more serious issues around Gox and the withdrawal delays. With the whole crypto currency realm being new and prone to 'wild west' culture, there are a million ways things could go pear shaped, and manipulation like I'm suggesting is bound to be an idea someone somewhere is either considering or actively pursuing).

Thanks in advance for all replies and comments

[LordMeowMeow]

Every market out there is manipulated in some way. Bitcoin is pretty vulnerable to big players right now because of the lack of liquidity. So short answer: yes definitely. It's part of the game.

[RenegadeMan]

Yes, no doubt you're right LMM. Just looked again, now there's a whole raft of trades of $626.72 and other ones close to $628.60. The lower ones are a bit over US$10 each time (they must have run out of $100 notes....just kidding). So little trade happening now...everyone's just waiting to see what will happen. Someone must be trying to push it down.

[Dalmar]

Those small transactions are from local brokers around the world with BTC services buying from the exchange (e.g. someone wanting to buy a pizza or drugs with BTC routing it via a broker etc). People actually using BTC to buy various things. The big transactions are mainly from speculators.

As for the lower price volatility compared to the previous days. It can easily be explained by the market waiting for more clarity coming from Gox before it can move. This is not manipulation...

[RenegadeMan]

But Dalmar they're identical BTC amounts for 50+ transactions. Those most recent ones were for 0.01633506 each time. How would this be for purchase transactions? It has to be the same purchaser buying at that amount again and again which is why I think it's coming from inside the exchange (and the same $100 or $10 being used over and over). I've never used Bitstamp, but whatever these continually recurring transactions are, their existence doesn't give me confidence it's all above board.

[leoragraves666]

It's just bots trading, nothing more.

[Dalmar]

But Dalmar they're identical BTC amounts for 50+ transactions. Those most recent ones were for 0.01633506 each time. How would this be for purchase transactions? It has to be the same purchaser buying at that amount again and again which is why I think it's coming from inside the exchange (and the same $100 or $10 being used over and over). I've never used Bitstamp, but whatever these continually recurring transactions are, their existence doesn't give me confidence it's all above board.

Sometimes you have whales who want to sell their coins but do it slowly via an algorithm in order to get a better price and not move the market. This is totally legal and not manipulation.

[keithers]

Yes manipulated, but I don't think as much as people think. There aren't that many major players out there with the ability to move the market.  Additionally, just because one may have the ability to do so, doesn't mean they are actively manipulating it.

[RenegadeMan]

Do you mean BTC-e degatz? BTC/USD is (right as I write) $611.20 whereas on Bitstamp it's $629.88. Once Mt Gox starts allowing withdrawals won't both BTC-e and the Bitstamp prices go down as lots of people start offloading their coins? What do you mean exactly...who from where would be buying and how will they be advantaged?

[hellscabane]

Like any market, some manipulation is bound to occur. And this effect is more pronounced with the disparity with bots on trading platforms. The less organic nature of algorithmic trading causes things to seem like there is a constant stack on prices; this in turn makes it seem like there is a significant amount of manipulation (likely more than there really is).

[Beliathon]

Every market out there is manipulated in some way. Bitcoin is pretty vulnerable to big players right now because of the lack of liquidity. So short answer: yes definitely. It's part of the game.

This.

[xinzark]

Every market out there is manipulated in some way. Bitcoin is pretty vulnerable to big players right now because of the lack of liquidity. So short answer: yes definitely. It's part of the game.

This.

Do shares being manipulated ? so do bitcoin .

[bananas]

What i don't understand is how other exchanges are not affected by MtGox, MtGox is a big player. The overall rate can't be immune to Gox rate and its sevral consequences in the market.

[cokeman2]

What i don't understand is how other exchanges are not affected by MtGox, MtGox is a big player. The overall rate can't be immune to Gox rate and its sevral consequences in the market.

they are..... i am certainly no expert ,i reckon  thats why bitcoins price is not  moving up any more, its at one place (could even go down more ), with so many selling/withdrawing  on mtgox  and the uncertainty keeping everything at a stand still

[RenegadeMan]

Yes, I would think that if Mt Gox announces tomorrow (as they're supposedly going to) that withdrawals are back on, there will be a storm of selling activity by people who've had their fingers burned and just want to get their funds the hell out of there altogether. When that happens there'll be the usual "sellers as far as the eye can see" situation which typically means a price collapse because people that hadn't intended to sell suddenly get drawn into the vortex and the selling becomes a self perpetuating market bear until en-masse people start questioning whether it's reached the bottom. Then we'll potentially see a bounce of sorts, but it could be a false bounce and catch many who pile on at that point unaware with a further run downwards. It will certainly be interesting. Once the Mt Gox situation is sorted and cleared up things should improve (if that actually happens....Gox may continue on in this paralyzed state for sometime yet)

[Nathonas]

Of course they're manipulated. Whales have a HUGE impact on bitcoin prices - whenever they sell or buy over 1k+ bitcoins, the price changes significantly. It's because they have such a huge effect on the price that they have an inherent interest in manipulating bitcoin to make a profit - selling off huge amounts of coins to cause bigger dips and then buying back coins for cheap. It's a very safe method of making money.