Short Term Update: genuine crash at bitfinex or an orchestrated manipulation?

chartThis is a 5 mins chart of Bitfinex, i suspect that the decline may have been started by few speculators who knew that due to the margin call effect would have done the rest stacking and forcing many sale orders in multiple accounts provoking a quick flash crash that pushed the market enough low to allow them to rebuy at a much lower price.

Aniway the price is recovering and moving towards the fast VWAP at $535 that will act as resistance for the next few days.

UPDATE:
An interesting article about what supposedly happened at BitFinex.

Advertisements

36 thoughts on “Short Term Update: genuine crash at bitfinex or an orchestrated manipulation?

  1. elie

    Great job enky. Now I am not sure if I should set a sell and short at 535 or hold.

    I think the rumors and manipulations are coming from trading view where I see lots of forecasters saying we might crash to the 400s. Hell some are even saying Bitcoin is dead and bearish till the end of this year etc. Personally I see that we could stay at the 440-500s for 1 week then move up like madness to 600-800s. Will see I guess

    Also the manipulations could be from whales trying to cash out. Then when we reach a good low they will buy in

    1. Enky

      It is not the first and it’ll not be the last time that many will call for the end of bitcoin, last time it was july 2013 when it was at 60$ with everyone scared to death. I’m not worried for long term till btc stays above the top of the previous cycle, the $266 april 2013 top now strong support.

    2. Amit

      Hi Elie

      I dont think we will move like madness after this crazy drop unless cyprus will get bankrupt again or maybe someone else. This was an hardcore drop and i guess most traders and investors will feel insecure To go long for a while now. With btcs the ones that buy high always get fucked…

  2. Mike

    Now, that smells like a real capitulation. This had to happen. Those behind this flash crash had to have seen this as the proverbial low hanging fruit. By all accounts, there were many traders who margined themselves to the hilt for the mega run. Now I wonder how the technicals are going be repaired….

  3. B.Mums

    Thankfully I had some alarms set that woke me up at 2.45 am EST. I saw the 520 support was nearly gone so I sold at 521 and was able to buy back when my alarm went off an hour later, at about 505. Best trade I’ve made in months, sadly, lol. Getting back on track finally.

    I was thinking about selling before bed since we never rebounded but I hate selling near the bottom even when everything indicates another drop. Glad I set those alarms for 520!

    Enky you’re good, almost too good, you a part of that flash crash?!?! Lol JK.

  4. Arthur

    Thanks Enky, as always. This flash crash phenomenon on Bitfinex needed an update indeed. Other exchanges didn’t follow, I think Bitfinex was even the only one touching the 400’s so far. And of course bitcoin is not dead, duhhh…! There are too many wannabe millionaires with a big mouth and no patience, that’s what’s happening. Shoo, shoo, off you go!

    Seriously, I’m going back to trading. Promised myself to wait till halfway August, and I managed to stick to that. Feels like a good moment to join the club again considering the recent developments (should have started a few days earlier though lol), and also since I found an old 2013 post from Enky called “How to daytrade on a 15 min chart”. I’m going to try sierrachart to see if I can get a feel for that too. When I left off, my trading batch was on 37.32 XBT after my last trade, and at 40 XBT it’s tippin’ time again. Keep you guys posted. 🙂

    1. Arthur

      Oh well, and Bitstamp decided to break the $500 as I wrote this. Crazy summer slump… I’ll be in trading mode at the next bounce up.

    2. Enky

      You can use also a 5 min chart if there is high volatility, higher the volatility lesser the noise to disturb you.
      You can use also btce , is the only one exchange with MT4 support, a good trading platform with tons of indicators available.

      1. B.Mums

        So I still haven’t dabbled in any trading software or chart sites… But I’m getting to the point of wanting to use such resources. Can someone just dive into mt4 or is there some basic info on it out there? Is mt4 good trading software for noob or should I learn with another first?

      2. Enky

        like any platform it requires you to get practiced, it is not an impossible mission, the platform is easy to use. There is an official website about the platform with all the community support etc…at http://www.mql4.com/ and documentation at http://docs.mql4.com/
        but first you need an account at btce and to activate mt4 support, all free ofc.

    3. Arthur

      Yeah thanks Enky. Since I’m still working with the guy from AllTrade to make it a pretty cool platform with features not seen elsewhere, I cannot recommend it yet (unless you want to be a beta tester for several exchanges). I think MT5 is out already, if I remember well. I’ll dive in that soon, and check out BTC-e too.

      1. Enky

        BTCe doesn’t support mt5, only mt4, btw it is good enough to start and enough advanced for the bitcoin market.

  5. Mike

    Most definitely the mega run scenario was simply too easy. The market never is that easy. It is now beginning to get interesting. I am keeping my powder dry in my regular brokerage account to buy some ETFs when they come online. That will be so much safer and you can actually take tax losses if need be. Not that I’m expecting to ….

    1. Peter

      The f*ck is going on with the price lol? Ebay is in TALKS TO ACCEPT BITCOIN. In just a few years there will be no point holding dollars, people really don’t have the foresight.

    2. Arthur

      Yeah, that’s what you get when only 1% really understands the bitcoin concept and its disruptive possibilities, and the other 99% consist of many amateur traders with a week-only vision… This market is still so freakin’ immature, it’s unbelievable. But they will wake up sooner or later, don’t worry Peter. 😉

      1. Peter

        I think I know why. As a student of psychology I have some insight on why there is so much FUD. National currency is linked to national identity, hence the heads of state are on the currency. Most people love there national identity even when not racist people still have tendency towards there own in-group (a favoritism). Giving up your currency is psychologically akin to giving up a part of your national identity. Were still dealing with racism even in this day and age even when its very subtle. Those who are enlightened can see though the crap and see what Bitcoin’s true potential is. These people deserve to make a shed load from Bitcoin.

      2. Anathema

        @Peter, Good point, but i’d prefer the term nationalism, or maybe patriotism. Meanwhile i’m almost fully in coins (made the stupid mistake to buy some after the first slight drop) so i’m getting pretty desperate. The last thing i’ll do now though is sell. I’m trying to not look at the price and just wait this shitstorm out, but it’s hard 😦

    3. Arthur

      “Giving up your currency is psychologically akin to giving up a part of your national identity. Were still dealing with racism even in this day and age even when its very subtle.”

      This is one of the most intelligent bitcoin analysis I heard lately. Never thought of that in this way, but it’s probably very true. This ‘racism’ is a slowing down factor for bitcoin integration and adoption. Most people need killer apps and very clear USPs to be convinced, and we are not there yet either. Hence the stand still. Makes sense?

      1. Peter

        Yeah deffo…. We need someone like Andreas Antonolpoulos to include this in his public speaking lol Once this becomes known everyone will jump into Bitcoin just to prove they are not racist lol

      2. Anathema

        “Once this becomes known everyone will jump into Bitcoin just to prove they are not racist lol”

        How about “Hitler didn’t own any bitcoins. Do you want to be like Hitler? lol

    4. Arthur

      When I think about it, 2013 was a year in which two tops occurred rather quickly after each other, so perhaps the November 2013 top will have a longer period of crashing and recovering than the April 2013 top. So instead we should maybe compare this period with the 2011 cycle, where a top appeared in June after which it lasted 22 months before a new top was seen (April 2013). This comparison will give us a completely different perspective, and humble our expectations at the same time I’m sure.

      Anathema, what is your tech research saying at the moment? Working on The Anathema Theory II already? 🙂

      1. Anathema

        Err, i don’t have any research, that’s what i’ve been trying to say lol. I only made one simple observation and so far it hasn’t come true. We’re just waiting for the effect of the big investors now i guess. As long as the price goes up in the long run i’m happy, how long it takes is not as important to me. I’m just wondering how much lower we’ll go first.

  6. croll83

    Enky, what about miner’s costs? are the miners in profit-loose? With difficulty adjustment the cost should be greater than 600$, why don’t they hold BTC to let the price increase?

    1. Arthur

      I’m not a bitcoin mining expert, but economy-wise it’s a business as many others. When prices are too low to make a profit, and the product can be stored till better times, then that is what happens. Untill the price recovers, then the product is sold. Meanwhile the past profits are used to keep the business running, maybe combined with selling some products at a little loss. Most entrepreneurs have the intention to stick around with their business long-term (even more so when they invested big in machinery), and they will take non-profitable periods as an opportunity to cut costs, or further finetune their business strategy. Until they go bankrupt of course, or discontinue their business before that.

      This is how running a business roughly works, and I’m quite sure bitcoin miners, big and small, use these type of economical guidelines too. I have no idea what the average costs of a bitcoin is currently, but when $500 is not enough to sustain their business and they still have means to continue, they will temporarily store the bitcoins mined, I’m sure.

      1. croll83

        “they will temporarily store the bitcoins mined”. In this case the supply will stop and if demand is high (and it is now if you see volumes) the price should rise… I mean this is obvious signal that this is a highly manipulated market. Good news like Apple getting back BitcoinApps, Dell, Expedia, NewEgg, now Ebay, don’t move price; Miners (market makers) don’t move price; only whales and govs moves price. 13Millions of BTC in circulation, if most of them are owned by few people, it means that user base is still too small. And if market is “whaled” (controlled by whales) now, why should we consider that other 8Millions of BTC will change this? If this analysis is correct, this market will be manipulated for ever. I’m in from 2012, I remeber when ‘news’ and miners drive the price, I remeber when we was all miners, all market makers. Now there is the Whale Elite… I love Bitcoin, I really believe it’s a gamechanger, but I’m start thinking this is going nowhere.

    2. Arthur

      Well, if you check http://bitcoinrichlist.com/top100 every now then, I think you will see that this top 100 is holding a slowly decreasing % of bitcoins. And the number of people owning 1 bitcoin or less is growing, on the other hand. Since bitcoin is still a penny stock in a way, and at the same time we cannot be sure if the whales in the top 100 have multiple wallet addresses, I think we cannot really say much about this yet.

      But over time with a growing number of users (holding and/or spending), I’m sure the bitcoin wealth will be spreading. But it takes time… Not months, but years. I think we should revisit this subject when there are 100M or 500M bitcoin users, instead of a few million currently.

      But I fully agree with you, it’s still a market that can be manipulated by a few people. That’s one of the reasons I call it a penny stock.

  7. Elie

    luckily i logged on and sold at 505 this morning with still a big profit. Started to go down right after I sold. Support shows around 450-470 depending on the exchange. I think I will stay out of this till next week, wherever we land and find resistance on we will have to consolidate there for several days or weeks before moving up from there. So for now I am thinking of not putting a buy order since I am on vacation and I dont have time to follow Bitcoin.

    1. B.Mums

      Good move once again. I held out once again hoping the triple bottom at 490 was the last before a jump… But nooooooooooo. I’m thinking I’m going to be selling near 500 or above 500 if possible to wait for the same thing. I was thinking about selling at 510 earlier too… Ugh.

      1. elie

        Yeh man were very bearish at this point. Wait till the storm is over than we buy in all cheap coins during that despair period. Same thing that happened long time ago when we were in the 400-440 range for several weeks or a month

    1. Elie

      so far seems we have strong support at 450. However if that fades away within the next weeks we could very well explore the previous lows respectively of 416 then if it breaks 402, then 365 and 340. But again too early to confirm. I highly doubt that we will go in the 200s, the big investors like wallstreet, second market and big firms building on Bitcoin want to keep Bitcoin healthy BUT they want to milk as much as possible cheap coins from weak hands. So I highly doubt they will stop now, they want to take advantage

      1. Peter

        MY thoughts fall along alone those lines too.. I had a look at google trends and seems interest in August has picked up quite a bit when you consider we are only half way through the month. Also, I think Bitcoin ATMS have been springing up at there fastest pace recently from my anecdotal evidence on Reddit. We could even be in for a surprise price rise (or I really need to stop being so optimistic lol).

Comments are closed.