Bitcoin plummeted 12.48% in 12hs, who is to blame for?

After finishing this article, you will have more infos about

• who is mainly to blame for this plunge?
• why Goldman Sachs backed off the trading desk plan has such impact on crypto market?
• why did Goldman make such decision?
• The traces of market manipulation
• EU re-regulate the crypto market

Table of Contents

1.Original sin of Goldman

1.1Why is Goldman’s decision likely to have such a huge impact on the cryptocurrency market?

1.2Why did Goldman Sachs make this decision?

2.Market Manipulation?

3.EU re-regulate

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Starting in the evening yesterday, Bitcoin price suddenly plummeted $1,000 in 12 hours.

bitcoin price chart data from citicoins.com

Faced with the serious shrinkage of cryptocurrency assets, most investors can't ease the fear when they can't detect the pulse of the market, helplessly to be the meat in the market plate.

So, what is the reason for the overall cryptocurrency market to dive down the cliff?

 

1.Original sin of Goldman

 

On the morning of September 5, Goldman Sachs decided to shelve the trading desk plan. In the afternoon, the cryptocurrency market began to plummet.

In terms of time, Goldman's decision may affect the price of Bitcoin coin.

BK Capital founder Brian Kelly commented on Goldman’s decision: “Although this (trading desk plan) was not part of the crypto ecosystem, it can represent the tendency of large investment institutions, which is not a good thing for the entire crypto market."

 

1.1Why is Goldman’s decision likely to have such a huge impact on the cryptocurrency market?

One of the most important functions of the “the Trading Desk Plan” is to open up channels for large funds to enter the market. Shelving this plan may imply that traditional financial institutions are not optimistic about the cryptocurrency market. This is the same as the bearish sentiment happened when the SEC rejected the Bitcoin ETF to bring to the market in July this year.

 

1.2Why did Goldman Sachs make this decision?

According to a business insider report on Wednesday, people who 'is familiar with the matter' said that because the cryptocurrency is still in the gray area of supervision in the United States, Goldman Sachs eventually made the decision.

The United States has not yet enacted legislation on cryptocurrency. The official statement on cryptocurrency is the SEC official's conclusion that "Bitcoin and Ethereum assets are not securities." However, this is not enough for the cryptocurrency market with a market value of $200 billion. Therefore, before the government explicitly enacted legislation, any institution's cryptocurrency business was “castles in the air”.

In fact, the Goldman Sachs had long been skeptical about cryptocurrency and warned investors in January this year: "The cryptocurrency is in a bubble."

At the same time, there are also views that Goldman Sachs is not the main reason for the sharp fall of the crypto market. The article believes that: Real Goldman Sachs has not completely abandoned the trading desk plan, but is working on digital asset custody services.

Goldman Sachs may be the main catalyst in this downturn. Under the complicated market, the "conspiracy theory" of market manipulation has never been absent.

 

2.Market Manipulation?

 

In addition to blame Goldman Sachs pulled off the trading desk plan, partial complaints that this plunge is controlled by the dealer.

According to Newsbtc, on September 1, someone suddenly held a short position of 10,000 BTC while the overall market was generally bullish.

Some analysts have questioned: unless the person knows some insider information, the short position has no meaning.

This operation was discovered by the RoninAI team.

The team used AI (Artificial Intelligence) technology to monitor the abnormal signal before the crash. They believed that there were of insider trading and market manipulation during the plunge.

This picture shows the anomalous activity of a sudden influx of the market (the blue circle in the figure represents the anomalous dynamics). If we zoom in on the map, we can see that in ten minutes before the crash, social sentiment exceeded the Standard deviation of three standard deviations.

BTC Historical data indicates that the social sentiment is more than 3 standard deviations above the average, which is an abnormal event.

If the "social sentiment" sudden changes, it means that the market has short-selling conditions. Social sentiment refers to: "When the market changes dramatic, for example, before the price of the currency falls, the market reaction suddenly rises abnormally. "

The RoninAI team said: "Social sentiment fluctuations often occur, and every time the AI algorithm responds to this." 10 to 15 minutes before the crypto market fell, the team monitored: social sentiment exceeded 3 standard deviations.

This sudden appearance of btc social anomalies is considered to be a phenomenon of market manipulation or insider trading.

The team believes that no matter who sells 10,000 BTC, it must repurchase at some point, and this may cause the price to rise sharply again. But it is not known when the repurchase will take place, because no one can predict how the event will affect the market in the short and long term.

Of course, this is only the speculation that the RoninAI team has based on some unusual activities in the market. It does not mean that they "caught" the culprit in manipulating the market.

"This round of decline is also likely to be an over-the-counter trader, hoping to get a low-priced chip, maliciously smashing the plate," Shangguanbi told the reporter, "but this is also a speculation."

Pay attention to the large amount of Bitcoin transfer, and must pay attention to the large amount of transfer between Bitcoin addresses. For example, on September 4th, there were three bitcoin addresses that had a large amount of transfer - 9,000 bitcoins were transferred at about the same time. This is considered to be the big dealer's selling behavior.

However, all of this above are speculations about the "conspiracy theory."

According to foreign media Techcrunch, the "culprit" may have another person.

 

3.EU re-regulate

 

According to Techcrunch, the newC 'EU crypto regulation' is also a big hammer on the price.

On September 5, according to a Reuters report, Bruegel, a Belgian think-tank, said in a report prepared for the finance ministers of 28 member states of the European Union that the EU needs to develop “common rules” for cryptocurrencies and set a single standard for cryptocurrency allocation and transactions. . The report emphasizes that any regulations must apply to current exchanges or related companies.

The day before, the legislators of the European Parliament also met to discuss whether to supervise the ICO in accordance with crowdfunding regulations. According to reports, the finance ministers of the 28 member states of the European Union will discuss a series of challenges brought about by the increasing popularity of digital assets on the 7th and 8th of this month, and decide whether the regulatory authorities should tighten regulations.

However, some people hold different opinions on this. Some articles pointed out that in fact, the real bearish news comes from a digital currency exchange platform that does not require an account - ShapeShift.

Not long ago, the company announced that it would cancel anonymous transactions, users need to register before they can use. It is known that the previous transaction using the platform, customers do not need an account, email or password, and there is no long registration process before you can trade.

Therefore, the selling pressure of altcoins is more fierce than mainstream coins. With fear, those who hold small currency will undoubtedly throw away their coins.

 

At the edicting time, btc price is $6,537, eth price is $231.7, XRP price is $0.30358 and bch price is $528. More precise live price info welcome to our website Citicoins.com.