Cryptocurrencies dive back down despite a slew of good news – is this proof that whales are moving the market?

whale-crypto-investors

The last couple of weeks has been quite the rollercoaster ride in the cryptocurrency world. At times the skeptics enjoyed saying “I told you so” to speculators who saw their fortunes diminish, and days later the tables were turned. Well it’s safe to say today the tables have turned again as just about every single crypto is down with Bitcoin sitting at $10,515 as of me writing this.

Of course, you could be reading this on Tuesday morning and Bitcoin could be at $8,000 or $15,000 – let’s be honest, nobody really knows. Here’s a look at where the top ten cryptos (by marketcap) are right now:

cryptocurrency-dip-jan22-2018

Today’s dip definitely shows that even a slew of good news might not be enough to move the market from red to green. One of the biggest stories of the day comes out of South Korea where the government announced that six major banks will be ready to provide services to cryptocurrency exchanges this month.

“The FSC’s announcement stated that 6 commercial banks including Nonghyup Bank, Industrial Bank of Korea, KB Kookmin Bank, and Shinhan Bank will have the new system in place from January 30, according to the Digital Times.” (Source – news.bitcoin.com)

Given that last week the markets tumbled on fear that South Korea would shut down cryptocurrency exchanges you would think the market would rally. But the reality is that the market may never rally again, or it might rally like it never has before. You can do all the technical analysis you want or quote whatever crypto You Tube star or old school money manager you want but the only right answer about where crypto is going is, who knows?

One of the most popular theories for the current market movement (and in general) is that whales are manipulating the market. Don’t know what whales are? Here’s a good quick description:

“Whales are powerful investors. An individual is considered a whale when he is powerful enough to change the value of a coin in a gigantic amount. When you see an extreme and sudden jump on the chart of your coin, it is for sure that there are one or more whales together influencing the value.” (Source – Steemit.com)

If this is true then your average individual investor/speculator is just along for a ride. While more crypto You Tube sensations are coming out by the day, all of their analysis could just be a bunch of malarky if whales are just deciding when to move the market up or down. Want proof of the impact that a single whale can make? Well there’s speculation that a single trader could have increased the price of Bitcoin by 700% in 2013.

“Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.” (Source – Business Insider)

If one trader can move the market that much, albeit years ago, why would that not be even more possible today, and by more than one trader. The reality is that good news or bad, cryptos might not really be moved by the headlines or FUD like most people would like to believe. The reality could be that whales are out their moving the market to make them millions (or more) while the rest of us hold on for dear life – HODL to the end, right?

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{ 3 comments… add one }

  • Jose January 23, 2018, 2:52 am

    In my opinion the market of the Cryptocurrency is very ballistic the analysts say that Bitcoin is not dead, but that an analyst is going to say if his current life is the Cryptocurrency.

    I think that this market should stabilize much more the sporadic rises, they represent very important losses among investors who invest for believing that a financial analyst has been studying a real market for years which the new and young analysts do not see as a professional a market that has experienced many cruel crushes of markets the last Subprime.

    Reply
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  • the_poet January 25, 2018, 11:40 am

    I’ve been in domaining (and one of your readers) for almost 10 years now, but in the last 4 years my interest in domain names has been steadily decreased in favour of Bitcoin. So, to answer your newsletter, yes, I’d love to see you cover the Bitcoin world more and more.

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