Following the events of 2017, Bitcoin endured complete and utter collapse, devastating retail investors around the world and leaving them with one question: How can a seemingly unstoppable asset with infinite potential have such weak support? On the surface it would appear to be a combination of damaging media coverage and the pullback of an asset that grew far too extended. However, a deeper investigation reveals a series of repetitions that suggest the downward pressure placed on Bitcoin seems to be a sequence in a much larger plan. This chain of events was spurred by the opening of the CME futures exchange and the culmination of events that followed potentially reveal a deeper pattern and a connection between influences that seem to have left a mark in several markets across the global financial systems. So is there a group out there who would stand to benefit from Bitcoins collapse? If so, is their influence exclusive to Cryptocurrency? Or is the answer far more innocent than that?
Beyond the veil:
Before we begin, it’s important to clarify that what I had highlighted in my last post regarding 2017 was what appeared to be Price Manipulation. While Manipulation certainly had a role in 2018 as much as it did in 2017, the primary force I’d like to draw your attention to in 2018 is what I’ll identify as Price Suppression. What’s the difference? The motivation driving Price Manipulation appears to be entirely for monetary gain. While I believe that Price Suppression is clearly an act of self preservation- not for survival, rather to maintain/enforce the status quo. So how can destroying the value of an asset be an act of self preservation? Although it’s not obvious using just the naked eye, the answer is pretty simple when all of the data is considered.
4th quarter 2017:
BTC last 92 days 2017 (Q4)
Optimism was high during the summer of 2017, which had earned the nickname “The summer of the bulls”, being summarized by one phrase “A new all time high” (and including the birth of Bitcoin Cash). Riding that wave of optimism, Bitcoin entered into the 4th quarter looking strong and trading around $4,300. But that price would be surpassed quickly with Bitcoin trading above $5,000 for the first time by October 13th. By this time, as Bitcoin was worth 4 times that of Gold, it was gaining attention from very powerful institutions on the global stage beginning with new standards of regulation around the world. It gained regulatory attention both as a reaction to a surge in demand with rising price and following China’s crackdown on Bitcoin during mid September. However, the good times would begin to slow down with an additional fork (split) in Bitcoins network, giving life to Bitcoin Gold(BTG) which almost immediately fell 66%.
By November 1st, Bitcoin had set a new ATH of $6,600 coming after the announcement of the CME futures exchange, which would make November the opening act of the final chapter of Bitcoins historic bull run. No more than a week later, Bitcoin sets a new ATH at $7,800 in light of the Bitcoin developers canceling the scheduled Segwit2x upgrade in order to avoid yet another hard fork. To send Bitcoin into the meteoric month of December, Bitcoin would surpass it’s first major milestone: $10,000 on November 29th.
Night’s plutonian shore:
The month of December would truly be the greatest work of art of the year. While the initial headlines would have a tone of Bullish optimism, the month would be filled with cover ups and manipulation. From December 6th to december 11th, the price would go on from $11,000 to nearly double to $17,000, where the price would nearly cap.
Price action from 12/17/17-12/23/17
Over the next 6 days the Bitcoin price would reach its historical ATH, which still holds today at $20,000, leading up to what many had assumed was going to be the most bullish event in Bitcoin history when institutional money would enter the space Did it trigger mass adoption? No. Did it trigger a mob of desperate investors who were terrified of missing out(TOMO)? No. Did it cause the price to go above and beyond mooning? No, quite the opposite ironically. On December 17th, the CME futures exchange would open its doors and during the exact hour of its opening, the price would reject for the last time off $20,000 and fall to $18,000. The following week would be tragic for Bitcoin investors as the price would flash crash 48% all the way to $10,400 by December 22nd. This would be the first event in a series forceful rejections that would serve as a ceiling to prevent Bitcoin from having a successful rally for the next 12 months, until Bitcoin should show signs of life again on December 17th of 2018.
So what happened? Why would Bitcoin begin to collapse as soon as institutional investors entered the space? Initially, the answer isn’t as obvious, but pulling back the curtain reveals a clear act of self preservation. But the preservation of whom? The institution? Or a powerful figure in the space getting out of the space with foreknowledge of what’s to come?
Novus Ordo Seclorum:
There’s a popular saying “Hindsight is 2020” and as the general public, us retail investors are all too familiar with hindsight when it comes to events like this. When things like this happen I’ve learned to pay attention to the investment news over the next few weeks, as you usually can expect a bombshell news headline that feels as if it would’ve changed everything having had knowledge of it weeks before hand. Now wouldn’t that be a luxury? That’s exactly why self preservation is so necessary for these people. But could it really be that simple? This is all because of insider trading? Maybe.
December 6th - December 22nd:
Does the fraud investigation of Bitfinex and Tether sound familiar? If you read my last post, I had referenced suspicious activity that had taken place on Bitfinex exchange toward the end of December. This suspicious activity appeared to have been committed by one individual or group of individuals, but they have remained “unidentified”. **Before going any further, one key piece of information that should be noted is that Bitfinex and Tether Ltd. are owned by the same individual**. However, taking a deeper look into this, identifying the potential individual doesn’t prove to be that difficult of a task.
On December 6th, Tether received a subpoena from the attorney general of New York, but this news wouldn’t hit the critical masses until January 30th. Whether it was done intentionally or unintentionally, this would provide an ample window of time for Bitfinex and Tether to get out while they still can. Looking back at the data, it appears they did just that.
Coinbase: BTC/USD volume 12/6/17-12/23/17
Bitfinex: BTC/USDT volume 12/6/17-12/23/17
Comparing the volume between Bitfinex and another mainstream exchange like Coinbase is all you need to see. Looking at the Bitfinex data, beginning on the 6th volume spikes up beyond 140k vs an 80k spike on coinbase, triggering price to sky rocket from $10,000-$16,000. Following this event, you can begin to see the purge. On every spike following, the selling volume significantly outweighs the buying volume. On December 17th, the buying would cease and they would begin what appears to be an exit scheme, maxing out on December 22nd with a sale spiking all the way up to 178k vs a 103k on Coinbase.
So what exactly happened? It appears they received a subpoena on December 6th and knew that they had to complete this plan by December 17th when the CME opened in order to maximize potential before the institutions arrived making manipulation more difficult. So on the 6th they create a dramatic increase in price and let the buyers do the rest as they begin to exit. Lining up perfectly with the hype of the CME opening, the buyers would buy it without asking questions. Then they are out by the 22nd.
Significant events of 2018
An alternative explanation for the dump on the 17th is exactly what everyone was looking forward to, the CME. Rather than it being a bullish day however, the institutions “Tame Bitcoin”. What’s the best way to deal with an overextended price? You smash it down. But why would the CME want to drag down the Bitcoin price as soon as it enters the space? Isn’t it interested in investing in Bitcoin? No, the institutions are a part of the establishment. The establishment only cares about one thing: Self preservation. Bitcoin represents a threat to the establishment and mainstream financial systems. So the best way to beat it is to join the markets and suppress it.
For anyone paying attention to the Cryptocurrency markets in 2018, one thing would stand out besides the catastrophic downslide: The onslaught from the media. But make no mistake, these media dumps were not random and every release seems to come in coordination with strong price movers. Not only that, but they also seem to be released in droves, often times several days or weeks after the story has already come to fruition. The question is, was this insider trading? Or were the media outlets under the wing of the CME?
With Bitcoin beginning to stabilize above $10,000, the media dropped 4 devastating stories that would begin a series of events where the media dumps groups of damaging stories once Bitcoin begins to show signs of life.
In light of these revelations, the dumpage would continue and Bitcoin would fall yet another 48%, exactly like it did on December 17th. It shouldn't come as a surprise why price would fall as a result, but why did the media wait until one single particular day to release all this information? Were they waiting for something? When it comes to the release of the Tether Ltd. subpeona, the timing is the most minor detail deserving srutiny.
Although, the Tether case deserves brief special acknowledgment. Not only did they provide them the perfect opportunity to get out, but even the timeline on the day of the release should be called into question.
- At 10:52 AM MST, Bloomberg Business published an article claiming that a subpoena had been served to Bitfinex and Tether by the CFTC
Bitfinex BTC/USDT price action from 10:52 AM- 12:00 PM
- Exactly 1 hour and 4 minutes later, the article was updated to include one minor yet massively important detail: The original article had not included a date, but this edit had added the date to be December 6th 2017.
So what had taken them so long to include this information? What would their interest be in not including it in the first place? Why did they wait 55 days until after the fact to publish the story with the general public? After looking at this it appears that Bloomberg was acting in their own self interest or in the interest of someone else.
The next dump closely followed on March 7th. "Coincidentally", this release this news came packaged as five different stories. More over, the dump was released just as the Bitcoin price began stabalizing again.
Following March 7th, two extremely bizzare but incredibly noticible patterns begin.
From March 7th until March 18th, a series of large dumps occur at exactly 11:00 on a daily basis
From March 24th to April 4th, the dumps are less specific, but several large profile dumps occur. The reason why this is out of the ordinary is because the seller does not appear to have any logical reason behind these large volume sales besides to drive the price down. This is bizzarre because they don't seem to make any effort to sell at higher prices, the dumps consistantly occur after the price has already begun to fall. This is the clearest example of Price suppression, not manipulation.
This was also recognized on the exchanges OKEx as well. The announcement is no longer available, but I was able to recover a copy of it:
“Dear valued customers, At 5:00–6:30 on Mar 30, 2018, a number of users performed unusual transactions to manipulate the price of BTC quarterly futures contract, making it deviate greatly from the BTC index. Based on our team’s investigation, the user closed a huge amount of positions at market price without considering the cost, causing it to drop to an unusually low level. We will disclose the transactions details in further notice”
The statement "without considering the cost" is extremely significant because it highlights the difference between Suppression and Manipulation. Suppression is to bring down the price, Manipulation is done for profit.
May 5th - May 23rd:
The following significant dumps are unique because they are not based on or surrounding media events. They began when Bitcoin was beginning to rally back above $10,000.
- Saturday 9AM ET Bitcoin is at $9,990 and ready to Break 10K any moment
- Mr. Warren Buffet Calls Bitcoin ‘Rat Poison’, again.
- Bitcoin drops couple of hundred and then tries to rally
- Drops $500 once the news hits the channels
- Mr. Bill Gates decides to trash Bitcoin on CNBC squackbox Monday morning
- Then came MtGox, Nvidia, S.Korea and couple of plain-vanilla-dumps at a few hundred dollar’s intervals close to each other. Everything is clearly visible in 15-minutes charts
- Missions Accomplished! $2,000 “natural correction” is achieved.
Zerohedge: Cryptos have been hit with a tripple whammy today. The last 24 hours have not been pretty for cryptocurrency bulls…Around 1pmET, the entire space tumbled almost instantly as large blocks went through in Bitcoin, with chatter suggesting the MtGox custodian was unloading once again…Cryptos Crushed By 24-Hour Triple-Whammy
For the remainder of May, the United States DOJ launches a criminal probe focusing on illegal tradeing practices going on within the market.
→ Justice Department opens investigation into illicit trading
→ Agency is working with CFTC, which oversees crypto futures
Then to finish the month there was another hack in S.Korea and a subpoena by CFTC to crypto exchanges etc. Thus, we have a 35% correction since Buffet comment.
35% "Correction" in total
Sharks Will Turn The River Red
Since July 2018 the Bitcoin volatility had reduced substantially. So much that it had become a stable coin. Experts were confident that $6,000 was the “final” bottom and soon we would start the journey to the moon: 50K by 2018 EOY, 1M by 2020 and so on. Few experts appearing on CNBC were generous enough to cut down their EOY-2018 predictions from $25,000 — $50,000 to $15,000 — $10,000. You were told: "Take-it-or-leave-it"; "this is your last chance to get aboard the “last” shuttle to the moon".
And, something snapped on Nov-14–2018. To everyone’s surprise, Bitcoin started another Flash-crash.The long held support of 6K was broken. Daily, Weekly, Monthly lines were broken. Now experts were looking for the next floor.
5 days and 3 stories later, bang we have a $3,000 Bitcoin. But what happened? How can an asset fall from $20,000-$3,000 and it can be considered "natural"? The only reasonable explanation that I can conclude is: we are used to it. But what does that mean? How can we be used to valuable assets bleeding out all of their value? The answer is simple: The CME. Every time institutional money or futures exchanges enter a space, the market plummets in value. This is because this particular institution is working with over $1 Trillion (with a T) in working capital at their disposal. Their primary strategy in these markets is Price suppression. But why do they do this and what do they have to gain? The answer is just as simple as the first, nothing. They aren't trying to gain anything, they are trying to preserve. The only interest they have is maintaining who they are and what their role is in society. So they suppress the price of these assets and aquire as much as they can. They abuse this power using the media to suck away the interest in these spaces in order for them to get a better price. They accumulate these things because they see the potential long term value in them and in the chance that one of these assets does end up playing a significant role in society then they already have a place on top. Here's a look at other markets in comparison to Bitcoin:
To close, I'd like you to ask yourselves: why would you think these assets are being suppressed? Is it because they enjoy seeing investors fail? Or do you think they feel threated by them? The latter of which is what I agree with. And because of this, I am ready to buy as much as possible.
Thanks for taking the time to read this! Feel free to leave your feedback below since I'm planning to write another post going deeper into the details I've found with the establishment entering other spaces , depending on the reception this gets. Thanks again but before you go:
HAVE A WONDERFUL DAY!
*The information presented above is intended as an opinion and should not be considered as financial advice*
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