hkh222

A half-baked theory about crypto manipulation

BITFINEX:BTCUSD   比特幣 / 美元
1850 39 36
I am fairly new to this market. I have been trying to figure out how some are manipulating this market. This is what I understand so far.

Phase 1: "They" buy BTC             with fiat (aka: accumulation).
Phase 2: buy alts with BTC             (aka: pump).
Phase 3: sell alts to buy back BTC             . This leads to distribution of alts without significant drop in their price, since BTC             price will go up at a fairly slow and steady pace due to buyback.
Phase 4: sell BTC             for fiat. At this phase alts price crash at a much higher speed than BTC             , providing opportunity for accumulation.
- repeat phase 1 to 4

I have marked each phase on the chart. Black is BTC             and blue is Ripple.

I think these phases can appear in different time frames. Sort of like fractals.

What do you think about this theory?


FYI: I am a researcher and I am not easy to convince without evidence.I don't believe in 99% of popular conspiracy theories. However, I am extremely skeptical about Crypto market. I am a techie so I had a positive bias toward Crypto technology. As soon as I got into this market, I completely changed my mind about the usefulness of these currencies. Perhaps, the notorious tether is the most useful currency in terms of utility, which can be seen in its relatively high "transaction volume"/"market cap" ratio. Or anything like Tether e.g. MKR . Some privacy-oriented coins are also good for, you know ... . The rest of these coins are there for gamblers like me or whales/cartels/market makers like Spoofy.
評論: For those of you who haven't seen spoofing, this image is a screen shot from Bitfinex order book that shows spoofing. https://thoren22.imgur.com/all/
There were countless number of such actions on April 8th with order amounts above 5k which disappeared immediately.
評論: this is the correct image address: https://imgur.com/lrA3ynP
評論: Note that Bitcoin is making higher highs while Ripple is making lower highs. This perfectly fits my description of phase 3. In a smaller time frame, we have, probably, just entered phase 4 (ABC correction). Expect alts to lose values at a much higher rate than Bitcoin. It may take just a day or 2.

評論: In a larger time frame, phase 3 has begun. Time for the king to rule.
評論: Put your tinfoil hat on before reading.

This picture shows the breakout moment. Usually, alts appreciate in value when BTC goes up. What you see in this picture is that they went down right at the breakout moment. What I can infer from this is that the alts and Bitcoin operators are the same people or they work in coordination. This signals the start of phase 3 which could last a few days. I don't have all the pieces of the puzzle yet but I hope to figure it out with your help.

評論: larger image

It's a very interesting theory. Even if it were true, however, we'll still be following a very specific pattern, one that we've played out many times before. Main reason, the market still needs to grow in order to survive, and ain't no way the powers that be are killing this cash cow.
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hkh222 Rainman2
@Rainman2,
I think we are in a different phase than that of 2017. If you look at the weekly chart's MACD, the market is bearish now, while in 2017 it was bullish. We might be somewhere like May 2014 or July-August 2013. @monkia has a very good analysis of different scenarios.
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@hkh222, he doesn't really provide a chart for the 20k+ scenerio. Here's mine if you're interested, it's a play on the Big W, or the 3 Peaks and Domed House Pattern:

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p@hkh222, oops wrong picture :)
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Buy BTC: We have a Big Bullish Rectangle
We have two Scenario:


Buy zone:
76XX$ or maybe 74XX$
(Buy after Bounce)

Sell zone:
85XX$ or maybe 88XX$


Buy zone:
82XX$
(Buy after Breakout)

Sell zone:
85XX$ or maybe 88XX$

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this is how i see it

PT.1



PT.2
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Just playing devil's advocate for a minute: that is a very simple and elegant algorithm you have defined and even such simple processes can lead to very complex structure in nature. It is easy to see some kind of guiding force or even intelligence behind these things when in fact what we are really seeing is an emergent property. For example is evolution by natural selection, the vast complexity of life on earth is easily attributed to a higher power, we even assign some cosmic significance or purpose for it, when in fact all this diversity can also be understood as an emergent property of a very limited algorithm which defines life and its actions. I'm sure you are familiar with the Mandelbrot Set which demonstrates INFINITE complexity from an extremely simple algorithm. If you don't know what it is when you first see it, you'd think it was actually designed by someone. And when delved deeper and understood just how complex it is, you might believe it was made by a god! https://www.youtube.com/watch?v=LbIyduxlbpk

The same can be said for many things like the cyclic nature of animal populations and I believe then why not financial markets? And crypto is a very unique market with extreme networking effects (hype). It is completely uncontrolled and the information being sent between participants can be as fantastical without any limitations. Here truth < lies. So maybe it only looks like it's being controlled by an intelligence.

That last step btw creates what is known as a feedback loop, when the fiat earned in Phase 4 is used to buy BTC in Phase 1. This can create chaotic effects. Assuming this manipulation is being run continuously by AI software, this process would eventually become more unpredictable with time and lead to extreme divergence from the mean, some larger than others (bull runs or spikes for instance....). However I maintain that the same effects can be achieved by millions of biological bots (humans) performing pretty much the same algorithm you outline.

This is all very wishy washy what I describe here but I do think the crypto markets would be a really interesting research area from a maths/chaos perspective due to the kind of relationships you talk about.
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hkh222 BarclayJames
@BarclayJames, Thank you very much for taking the time to write. I do not sure what I wrote is correct, that's why it's a half-baked theory especially in the absence of hard facts. It's easy to speculate than to prove. This is just my skeptical mind talking.

I do believe in emergent properties like mind as an emergent property of brain, and evolution as you mentioned it. However, I just cannot convince myself yet when it comes to Crypto market. I was one of the blind and brainwashed millennials. Without doing any research, I just jumped on the bandwagon, that the Crypto tech is the ultimate savior of mankind from tyranny of governments. I had no experience about trading. But, as soon as I got in, I realized that so many things are not right with this market behavior. Then, I found articles on the internet from people who shared the same views. It cannot be a coincidence that I, a biased Crypto-loving person, came to the same conclusions as many others. Here is an article about one of the instances of market manipulation: https://techcrunch.com/2018/01/15/researchers-finds-that-one-person-likely-drove-bitcoin-from-150-to-1000/ .

When you compare today's fractals with the 2013 fractals, you find little similarity. In addition, patterns of the coins traded on Bitfinex look very different from elsewhere. Why these emergent properties are not consistent? Isn't it because of a few are controlling the markets with different strategies?

The market behavior today looks much more natural than pre 2015.
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@hkh222, Hi, no problem, it's a topic that interests me. I'm not familiar with Bfx since I never actual traded there but I do know that article. I think only that the similarities between altusd markets and btcusd might be explained by the fact that they are all essentially the same asset (like you point out, all the fundamentals are pretty meaningless - the markets are just hype driven) and so people behavior in a similar way throughout the life cycle of a particular coin market. These patterns develop as more people trade/use a coin (adoption). I was just throwing some ideas out there, I'm sure you could probably do a PhD on this subject.

It can also be that the entire crypto market is fake, I have considered this too, with the exchanges working together in a cartel like way controlling everything by bots. Given the 10 timespan it is not inconceivable that such a network could develop - but it would be extremely difficult to keep secret, things would go wrong (like the other day when OKex crashed and the exchange said it would just reverse all transactions and pretend like it didn't happen, that was pretty funny huh? just one exchange crashing like that and then saying nahh forget about it... weird, I didn't think trading was like that ;) )

on the other issue, I think you can find BTC fractals from 2011 that still appear in alt markets today, you can check my ideas to see what I mean.
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hkh222 BarclayJames
@BarclayJames, "It can also be that the entire crypto market is fake, I have considered this too, with the exchanges working together in a cartel like way controlling everything by bots. " lol . A bit far fetched, but it is very very possible. In that case, Bitfinex is the godfather. Imagine if Tether is not backed by USD. It would be the biggest scam in the history. A fake coin used to pump Bitcoin, which is used to pump other fake coins.
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