How fast can the CEX affect the bitcoin price negatively?

[Accardo]

Hi everyone, I was having a conversation with a friend on Linkedin and he pointed out some things about the price of bitcoin and the CEX in terms of market sentiments. He provided some statistics about the trading volume of some exchanges starting from the Decentralized exchanges having a total of $4.9bn 24 hours trading volume and Binance a centralized exchange has 4 times the entire 24hours trading volume of DEX with $16.7bn 24 hours trading volume with some other CEX like Okx with $4.7bn 24 hours trading volume.

His point that got me thinking is that if the regulators sanction the top 5 CEX for refusing to ban Russia the price of bitcoin can drop to 30k then down to 8k. Or even if they didn't sanction the CEX that the news about sanctioning them can as well drop the bitcoin price.

Given that bitcoin price have been affected by market sentiments in the past when the press say things like China regulating bitcoin the price drops down and whales buy then later the price pumps back again without any action on bitcoin from China either. So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

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[carlfebz2]

Given that bitcoin price have been affected by market sentiments in the past when the press say things like China regulating bitcoin the price drops down and whales buy then later the price pumps back again without any action on bitcoin from China either. So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

No one knows on what would happen next but its impossible for these things to be ignored when we do talk about market sentiments or events that happening around specially if you do see that the news could really

make out some big effects if it connects to economic situation then it would most likely be having that kind of effect but somehow it would not be an assurance for it to happen though but its better
to be watchful so that you could take advantage and able to make such step or action according to your own risk management or analysis.

[GreatArkansas]

Why the price of Bitcoin could go below that price level just because of having sanctions on exchanges about Russia?
It will be always on the market, buyers and sellers will decide on it. If people will treat that news or sanctions as negative and they choose to sell, then I am positive that the price of Bitcoin will decrease.

[BitMaxz]

Given that bitcoin price have been affected by market sentiments in the past when the press say things like China regulating bitcoin the price drops down and whales buy then later the price pumps back again without any action on bitcoin from China either. So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

If you talking about the news and if it can affect the Bitcoin price then yes it can affect the price a bit. But the news that you talking about CEX sanction I don't know if it will going to affect the price of Bitcoin it's not actually bad news. Or if it's bad news I don't think it could lead to a massive Bitcoin price drop.

It's normal that we see the price drop and the price of Bitcoin is always depends on the demand and supply actually if you are here for many years you should also aware of Blockhalving where many HODLERs and Traders favorite time to buy and hold. And every year there is no difference in the Bitcoin price movement the price movement right now is a bit slow compared to the past every after the blockhalving.

[PX-Z]

If these exchanges refused, sanctions could be to terminate their permit to operate on such country say US, or UK and its users, but I don't think it will affect so much on crypto price not only on bitcoin.

At that time of threat of sanctions, exchanges will do what it needs to do, so since the community will be affected, it will ask its users what's their opinion about the issue and take necesaary steps later.

[TimeTeller]

Why the price of Bitcoin could go below that price level just because of having sanctions on exchanges about Russia?
It will be always on the market, buyers and sellers will decide on it. If people will treat that news or sanctions as negative and they choose to sell, then I am positive that the price of Bitcoin will decrease.

The possibility of freezing the Russian accounts on these exchanges is always there.
But I don't think they will sanction the exchanges as a whole.
Their customers are across the globe so putting a sanction is not a very good idea.
But of course, if that happens, definitely there will be price "crash".
It may be temporary but who knows? I guess, that situation is yet to be seen.

[stompix]

He provided some statistics about the trading volume of some exchanges starting from the Decentralized exchanges having a total of $4.9bn 24 hours trading volume and Binance a centralized exchange has 4 times the entire 24hours trading volume of DEX with $16.7bn 24 hours trading volume with some other CEX like Okx with $4.7bn 24 hours trading volume.

Volume is meaningless in cases of panic.
Poeple always say it's billions in trade, a simple 1000 Btc drop won't do a dent in it, but when you to and look at the market dept you will see how one such drop could send the price down to 36k area, a 3k dump would go below 30k.
It's like having two glasses of water 3/5 full and dumping half of that after from one to each other, you can do so for gallons after gallons without spilling a drop but try to unload all of the water from one to another, it will spill over.

His point that got me thinking is that if the regulators sanction the top 5 CEX for refusing to ban Russia the price of bitcoin can drop to 30k then down to 8k.

Whenever poeple say it will drop to x, my obvious question is why not y?
So, why 8k and not 7 or not 9?
Besides, it will depend a lot on who is the one taking those measures, it's one thing Canada doing this and one different thing for the US.

Anyhow, I don't think the drop will be that serious, probably it will trigger a buying pressure from customers not risking their money in wire transfers and buying BTC to avoid further troubles, bitcoin has become really unpredictable during these days, I swear every piece of news has the exact opposite effect.

[Darker45]

I don't share your friend's view. Perhaps we might want to go into the details first before arriving at a conclusion that sanctioning the top 5 centralized exchanges for not implementing a ban on Russia will pull Bitcoin's price down to $30,000 and even much lower. Does your friend know how much of these top centralized exchanges' volumes are coming from Russia? After all, the country wasn't that open to Bitcoin until just recently with the surprising move of adopting Bitcoin as "analogue of currencies."

Also, why should the exchanges be sanctioned? In the first place, was there an order for them to ban Russia? I think there's none. Because if there is, many of these exchanges will certainly comply.

[bussybuddy]

I'm looking for the seriously negative opinion you share about CEX but that is not a convincing one-sided view. The fact that CEX is leading by refusing to ban Russia is understandable because if the crypto market continues to follow factors outside of economics, such as politics, it will be difficult to achieve the future goals we are thinking about. Looking back, from the beginning to the present, this market has experienced what events? But in general, during the current period of strong volatility, if one is too calculated, then take a break and wait for the next movement.

[franky1]

$8k pfft
the guy has no clue

first of all if its costing alot more then $30k to mine anywhere on the planet with the most efficient asics that ever exist and with the cheapest electric possible..

if the price even dared get near to $30k everyone would go onto a buying frenzy because everyone cant even mine it that cheap so a great time to buy.

the buy pressure would stop it getting that low.

however
if some CEX had a mtgox situation where they closed for business of withdrawals.. . then just like MTGox where they had a few hours/days of internal trading trying to escape the exchange but couldnt causing mtgox prices to go down. the other exchanges would just ignore using that exchange as a price peg and not follow it... just like what happened in the final days of mtgox.

infact in this russia situation where fiat would be the reason for cut off instead of btc.(mtgox cut off btc withdrawal) people would try exiting by not converting to fiat(selling) to exit this time. but instead try converting their locked in fiat for btc(buying) meaning that exchanges prices would go UP

[rat03gopoh]

Haven't found any actual statistics on how bitcoin has functioned so far. However, based on the number of bitcoins stored in the top exchange wallets (hot + cold wallets) where about 10% of the supply is there, it is assumed that bitcoins are mostly used as investment/trading assets around the world.
People's dependence on the price of bitcoin is based on these exchanges. I think the government has enough power to influence the price in a negative direction by cracking down on CEX.

[aprilnot]

<----->
So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

yes it will market will lose volume drastically. in a broader sense, it will destroy the market and short term effects there will be a dump. basically even the slightest negative news can have an effect, so it's highly unlikely if any news of sanctions for major exchanges, will not have any impact on the market.

[tranthidung]

They can not ban Bitcoin, never because Bitcoin has a healthy decentralized network so if you have your own nodes or just your own non custodial wallet, you can use Bitcoin, broadcast your Bitcoin and your transaction will be confirmed, sooner or later on the network.

CEX can only freeze accounts on their exchanges according to local regulations. It in turn relates to geo-location of a CEX and how local government want to do with Russia related things. If government wants to freeze Russian accounts, temporarily, they will order it to CEX under their control and regulations. CEX can not do things against it because they have to obey local rules to keep their exchange operating well.

Effects on Bitcoin? If it is not a big exchange, no big effect at all. If it is a big one, big effect in short term. Long term, no big effect at all because Bitcoin after 13 years here, proves that it can survive through many challenge, big or small, local or global.

[Beparanf]

To be clear, Your friend argument was he is assuming that top 5 CEX will be restricted globally by imposing sanction due to there recent behavior towards neglecting Regulator request towards Russian user.

IIRC, CEX has the majority of trading volume for crypto market, Restricting them will surely gonna create FUD that will result to massive selling just to get out traders money into fiat for them to access it. Only die hard traders and Yolo holders will gonna left behind just like what happened 2017 Bitcoin pump and dump. I strongly believe that CEX play an important role for to stabilize the price of crypto market but no one can predict the exact price it will go down but surely it will go down because its a strong FUD and crypto market is very sensitive on matter like this.

[pooya87]

He provided some statistics about the trading volume of some exchanges starting from the Decentralized exchanges having a total of $4.9bn 24 hours trading volume and Binance a centralized exchange has 4 times the entire 24hours trading volume of DEX with $16.7bn 24 hours trading volume with some other CEX like Okx with $4.7bn 24 hours trading volume.

Apples and oranges are being compared here.
For starters DEX usually has lower trading volume and if it is a true DEX you shouldn't even be able to know what its volume is because there is no central authority to be aware of trades and compute a sum of all trades!!!

The volume for Binance which I assumed was taken from CMC is the total Binance volume not bitcoin trading volume. That is vlume of bitcoin/tether, bitcoin/altcoin, altcoin/altcoin,... from hundreds of altcoin markets. When you are comparing volumes you should compare volume of a single market not all markets combined. Meaning only bitcoin/fiat markets. Which turns out Binance has a very small volume there.

Comparing Binance with 1654 markets with OKX with a much smaller number of markets is meaningless.

This comparison is also not taking into account the fake volume exchanges report since it is looking at total volume not per market.

It looks like your friend is just throwing numbers at you to make a conclusion that he likes.

His point that got me thinking is that if the regulators sanction the top 5 CEX for refusing to ban Russia the price of bitcoin can drop to 30k then down to 8k. Or even if they didn't sanction the CEX that the news about sanctioning them can as well drop the bitcoin price.

Cracking down on exchanges (regardless of their volume) can only cause temporary panic sell among newbies. What is clear here is that your friend is "wishing" for $8k because he was too scared to buy when price was that low and he is dreaming of those lost opportunities

So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

News has always affected bitcoin price, the question is the degree which is not possible to predict because it depends on the degree of the news. For example they can't attack all bitcoin exchanges, they can only attack those in their own jurisdiction. For example US can attack Coinbase not Binance. It also depends on the "attack", are we talking about shutting down the exchange or just a slap on the wrist? Finally it depends on how the market manipulators run with the FUD and how weak hands react to it.


In summary your friend is either a newbie who doesn't understand the market and as I said he is just throwing numbers at you or he is a manipulator spreading FUD.

[avikz]

His point that got me thinking is that if the regulators sanction the top 5 CEX for refusing to ban Russia the price of bitcoin can drop to 30k then down to 8k. Or even if they didn't sanction the CEX that the news about sanctioning them can as well drop the bitcoin price.

Then regular trader will move to DEX. In crypto market, people are spoilt with choices! So even if US imposes sanction on the centralized exchanges like Binance, bitcoin or other cryptos will not show a long term effect. A temporary effect will be there till the time volumes move to DEX and that's it! But you never know!

Given that bitcoin price have been affected by market sentiments in the past when the press say things like China regulating bitcoin the price drops down and whales buy then later the price pumps back again without any action on bitcoin from China either. So do you think that bad news about bitcoin affects the price of bitcoin? Using the example above if such a news arises about sanctioning the top 5 CEX will the price of bitcoin drop drastically?

We have not seen such actions previously in crypto market. China was anyways a closed country without much foreign influence. So what happened in China, didn't affect the bitcoin market in a big way and also the effect didn't last long. Also during this war situation, I don't expect bitcoin price to drop significantly. It will remain volatile but significant drop is unlikely to happen!

[franky1]

Then regular trader will move to DEX. In crypto market, people are spoilt with choices! So even if US imposes sanction on the centralized exchanges like Binance, bitcoin or other cryptos will not show a long term effect. A temporary effect will be there till the time volumes move to DEX and that's it! But you never know!

in proper DEX there is no central "order book"
meaning people start to charge premiums or discount. causing a large array of differing prices.
(personally i want to see this as i hate how exact and sheep following these exchanges are becoming where their market charts look too similar).
but the effect is that the variability of the market prices(plural) would be more volatility. and also a dilution of liquidity per 'exchange' meaning much easier to cause pump and dumps

EG instead of like 10 exchanges with orderbooks with market depth of 1m coins/$bilions fiat each. preventing a complete crash... thousands of people will be individually having their own price points and less liquidity each, meaning crashes and spikes can happen alot easier.

so in short a DEX can affect the prices faster and more negatively (well unless you enjoy the volatility and can take advantage of picking the right DEX partner at the right time to take advantage of price swings(i do))

[hugeblack]

If something real and dangerous (Hacking, day zero, manipulation) happens to platforms like Binance, Coinbase, grayscale and the top exchanges in terms of trading volumes, we may see corrections of 40% or more based on prices and therefore the possibility of a return to levels above 20K and below 30K will be present.
The possibility of a decline below 20k is small, but it still exists, but it is difficult to achieve realistically.

To control the price, you need to control the supply and demand, the quantity supplied is controlled by the miners, who may force the price to stay above these levels for long periods if the demand continues to increase.

[evilgreed]

               The guy op has spoken with clearly has a close minded opinion about the things going on. It obviously will not result to such tragic situations even when the CEXs get banned or something. And in a worse case scenario, there are still DEXs out there to convert all of the bitcoins that the users converted to other coins in an act of avoidance to the ban. But thinking closely, on an investor's point of view, by the time the prices even reaches the 32k range, I'd already start buying and just DCA as price goes lower. And if other investors also thought the same, I highly doubt that 30k would even be possible nowadays. I could talk more about the misinterpretaions I see on the topic but it would take too long so I just covered the most important parts that I can think of.

[Accardo]

I'm looking for the seriously negative opinion you share about CEX but that is not a convincing one-sided view. The fact that CEX is leading by refusing to ban Russia is understandable because if the crypto market continues to follow factors outside of economics, such as politics, it will be difficult to achieve the future goals we are thinking about. Looking back, from the beginning to the present, this market has experienced what events? But in general, during the current period of strong volatility, if one is too calculated, then take a break and wait for the next movement.

Yeah, but these exchanges are centralized and they don't convey the initial plans of Bitcoin. But, bitcoin needs them to excel although the law can change at anytime because it's under the control of Government already. Since the use of KYC is everywhere. The denial of the CEOs from banning Russia would have been no problem if they were decentralized. We need them both but, the centralized exchange have high trading volume more than the DEX. Showing that people prefer the centralized exchanges over the DEX. I think CEX serve as a means of luring more people into cryptocurrency market for profits and boosting the price of bitcoin and cryptocurrency at large.

[verita1]

I think there is no reason for concern that the price of bitcoin may fall due to the current crisis. The Ukrainian government has raised more than 10 million in cryptocurrencies and the price has not been affected as negatively as a delicate case that we are experiencing.

Experts in this article show their most optimistic side:

Michael Rinko, venture associate at AscendEx, said $38,000 is the number to watch. “This is one of the biggest accumulation phases,” he said. “You can tell the cost basis of every single holder. More people bought at $38,000 than at any other level above or below for a good margin. It's a very key level because it could be support on way down but also resistance on way up.”

https://www.cnbc.com/2022/02/28/bitcoin-jumps-8percent-after-treasury-imposes-new-sanctions-against-russian-central-bank.html

[Wexnident]

Well, we use DEX then. I don't think it's that much of an issue, VPN's are a thing and should let you access exchanges if they were banned by your local ISP's (though it may result in a ban if you get found out, but still, being careful can bypass that), and if you don't want to do that, as I said earlier, DEX should still be easily useable. Plus, if they were to sanction CEX because of wanting to sanction Russia themselves from getting their money out, then sanction everything, from buying gold, stocks, other fiats, etc., otherwise, it's just a useless endeavor.