- Bitcoin has shown increased volatility in recent weeks.
- The asset has started the new month in a similar fashion.
- Traders now speculate that Bitcoin’s price is being manipulated.
Bitcoin’s price has shown significant volatility recently, bouncing between $27,000 and $30,000. Last week, the asset’s price reached above $30,000, only to wipe out its 24-hour gains within an hour.
The asset is off to a rough start in May, seemingly continuing the trend. After closing above $29,000 for the last three days, Bitcoin is trading for $28,617.71 at the time of writing, per CoinGecko data. It represents a 2.3% drop in value over the last 24 hours. Amid the growing uncertainty, some traders now speculate that the price is being manipulated.
Price Manipulation?
Bitcoin’s recent pattern of running up to $30,000 only to violently dump afterward is beginning to raise eyebrows. Prominent crypto trader “Algod,” @AlgodTrading on Twitter, argued that the current uncertainty in the banking sector ought to be perfect for Bitcoin, questioning why it appeared that Bitcoin was not receiving significant inflows.
In a tweet on Monday, May 1, “Duo Nine,” @DU09BTC, another respected crypto trader, alleged that the price is being manipulated.
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"Not sure who's manipulating the price, but at this point it's quite obvious," he tweeted. Pump the price, get FOMO to buy, unload bags.
Duo Nine urged traders to remain cautious till the current cycle ends.
Duo Nine is not alone in this thinking, as North Rock Digital Founder Hal Press described Bitcoin’s latest price action as “bait,” adding, “this wasn’t the first bait and is unlikely to be the last.”
In a tweet on Sunday, April 30, the former Morgan Stanley associate urged investors to remain patient and exercise discipline. According to Press, the markets would likely continue to tease bulls as “impactful regulatory action and significant price inelastic selling are occurring simultaneously.”
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WhaleTrades, @WhaleTrades on Twitter, has reported over $29.6 million in Bitcoin shorts across Bybit and BitMEX in the last 24 hours. In the latest instance, one whale reportedly dumped $3.6 million worth of Bitcoin on Bybit.
On the Flipside
- The Fed is set to make a rate hike decision this week, which could lead to increased volatility.
- Bitcoin market sentiment remains strongly positive, as reported by the Bitcoin Fear and Greed Index on Monday, May 1.
Why You Should Care
Bitcoin’s price movements often dictate the direction of the general crypto market and can result in significant gains or losses. Last week’s volatility saw short and long traders record substantial losses.
FAQs
While market manipulation is illegal, it is always possible, and Bitcoin is no exception. Researchers have claimed that the bulk of Bitcoin’s price rally in 2017 was due to market manipulation.
Several factors affect the price of Bitcoin. The predominant factors, however, are the market forces of demand and supply.
Bitcoin’s volatility changes with time but can be measured at any time using one of several available indexes. One of the most popular indexes for measuring Bitcoin Volatility is BitMEX’s 30-day Historical Volatility Index. As of writing, the index places Bitcoin’s volatility rate at 17.20, significantly lower than the peak of 28.24 in March when the asset recorded significant price gains.
In 2017, researchers claimed that the price of Bitcoin was manipulated using Tether. According to the paper, unknown investors on Bitfinex used Tether to purchase Bitcoin after significant price drops to “stabilize and manipulate” the price.
Read this to learn more about Bitcoin’s wild price swings:
Bitcoin Investors Grasping for Answers After Wild Bounce Between $27K and $30K
Learn about Taiwan’s push for crypto regulations:
