With the current market recovering from the recent Bitcoin [BTC] pull back dragging the price of Bitcoin under $7,500, a hunt has ensued for the source. Bitstamp, the Japanese cryptocurrency exchange which saw a crucial order set tremors in the market is the touted source, however, some dispute this claim.
Correction or Manipulation?
The term “manipulation” has also been thrown around in light of the news breaking out that a massive sell order of around 5,000 BTC was placed on Bitstamp. The order was executed at a low price of $6,200, while the market price of the coin was well above $8,000, causing the decline.
Bitstamp’s deterrent catalyzed BitMEX’s rampant liquidation of over $207 million long positions. Since the latter’s price index comprised of the weighted price of BTC on Bitstamp and Coinbase Pro, BitMEX prices also briefly crashed.
Manipulation rumors were fuelled by the individual nature of the transaction that triggered the crash. Furthermore, given that the April ascendance over $5,000 was purported to be initiated by a single automatic buy order of a substantial amount of Bitcoins, manipulation rumors cannot be waived off.
Dovey Wan, the co-founder of Primitive Ventures referred to the person behind the event as a “jackass” who “put up an aggregated sell of 5,000 $BTC on [Bit]stamp”.
Regardless of the similarity between the culprit to a farm animal, the objective of the pullback, whether it was planned or down to market forces has not been determined yet, but notable analysts have thrown their hat into the ring, suggesting no foul-play.
Weiss Ratings, the crypto-specific rankings company, which, at times has rubbed the cryptocurrency industry the wrong way on predictions, suggested an absence of “manipulation” and termed the fiasco as a “normal market correction”. Citing and then immediately dismissing the Bitstamp case, Weiss laid emphasis on the time of the crash.
The rating giant stated that the price of the king coin was dropping “25hrs BEFORE” the Bitstamp sell order of 5,000 BTC at the low-low price of $6,200; hence this is not a case of manipulation, rather a plain old market correction. Their May 17 tweet read:
“Today, the price of #Bitcoin abruptly sank more than 20%. Some say this was due to manipulation. #BTC had been going down for 25hrs BEFORE the big order hit at #Bitstamp. This isn’t manipulation – it’s a normal market correction. #crypto #cryptocurrency #altcoins”
No doubt that the Bitstamp order hit the market hard, given the gravity of the exchange and the severity of the order, not to mention the consequences it had on the BTC-BitMEX market. However, the top cryptocurrency managed to hold firm above $7,000 and is now well over the $7,300 mark and moving upwards.
Whether it was a “jackass” induced price manipulation or a periodic market correction, the pullback is looking to subside with the king coin posting a 1.2 percent gain in price against the dollar in the past 24 hours.
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