On the Bitstamp cryptobase alone, 400 bitcoin were sold in four minutes yesterday. This led to a substantial fall in the price of the stock market. The price of bitcoin lost more than six percent in less than five minutes. In the meantime, the course is moving more calmly and it is time to take stock.
Hundreds of bitcoin sold in a short time
The graph below shows the bitcoin rate in dollars on Bitstamp. The red and green bars indicate the volume. In other words: is more being bought (green) or sold (red)?
- 2:41 pm: 124 bitcoin were sold, at a time of almost a million dollars.
- 2:42 pm: A minute later, the tide seemed to turn a little, but a sale of 124 bitcoin pushed the price of bitcoin even further down.
- 2:43 pm: Both at 2:43 pm and 2:44 pm 75 bitcoin were sold.
As a result, every minute the price of bitcoin fell by one hundred dollars.
This pattern was not only seen at Bitstamp, but also at other international fairs. Consider, for example, Coinbase, Bittrex and Bitfinex. At all these stock markets, bitcoin started dropping exactly at 2:41 PM.
Do the Wall Street whales have to do with this?
The question now is why so much bitcoin is sold in a short time. Does Wall Street have anything to do with this?
At CME Group you can trade in bitcoin futures. With bitcoin futures it is possible to speculate on the price of bitcoin. If you go long, you bet on a price rise. With short you assume that the price will fall.
The bitcoin future contracts expire every last Friday of the month. Because the contracts are settled in dollars, it is not possible to influence the exchange rate via CME Group. In addition, the price of bitcoin at CME Group is not determined by supply and demand, but is an average of the bitcoin price of Bitstamp, Coinbase, Kraken and itBit.
Rumors are that traders in bitcoin futures also have a hefty finger in the porridge at crypto fairs such as Bitstamp and Coinbase. If these traders go short on bitcoin, they can sell a lot of bitcoin on a regular exchange such as Bitstamp. Then they earn extra money, because they have gambled in advance on a fall in prices.
Exactly one month ago, on September 24, bitcoin suddenly dropped very fast. The situation of that time is suspiciously similar to that of today:
Record volume on Bakkt
So where there are losers, there are certainly also winners. Smart investors try to earn money with a fall in prices. And you also saw that on bitcoin future platform Bakkt. It had its best trading day ever yesterday. Yesterday, 640 bitcoin were traded on Bakkt, worth more than 4.8 million dollars.
ICYMI: Wednesday’s Bits Bitcoin Monthly Futures:
? Traded contracts: 640 (+ 653%) (New ATH ?)
Before Day before: 85
? All time high: 640
* bleep blop * tip sats: https://t.co/TF6sNUwWpO ? pic.twitter.com/cUG9qzf47E
– Bakkt Volume Bot (@BakktBot) October 24, 2019