07 May BTCUSD. Main market myths. Part 2.
In my previous analytical article I started busting the current market myths and promised to make a forecast for Bitcoin before and after halving.
I’ve been dealing with cryptocurrencies for many years already and I know how a big player usually behaves. The first thing a good manipulator does is create “rich soil”: information noise and unipolar expectations in most market participants.
The hype around Bitcoin halving and the dollar’s devaluation is a good example of that. Next, a manipulator needs to warm the market. Huge money is invested in the right direction to confirm information noise with the “right” movements on the charts.
These two points make up the market state a manipulator needs and provoke Panic Buy. A big player’s mood can be easily detected on one-minute time frames.
The chart above reflects 2 moments. The first big purchase started on the 15-minute time frame in the morning on 28th April, Greenwich Time, when the market was standing still. The manipulator bought out sellers’ orders and made room for growth. The market reacted unwillingly to that provocation. Most participants’ activity was very low, but eventually the crowd started moving upwards as the big player had placed a lot of orders to buy and thus lent support from below. The counter force showed up on the night of 28th April. Another big player bet on Bitcoin’s fall. The volume was big, but the price remained where it was. It means that two titans were fighting for the market direction. The seller lost the fight and the price went up (the second red ellipse in the volume indicator on the chart above).
The bullish manipulator made an insurance shot on 29th April when bearish orders were removed again and buyers’ orders were supported. I marked these 3 cases with red ellipses. These three unremarkable cases speak loud of the manipulator’s intentions. It means that the manipulator’s money and positions are located in the area of 7,700 – 8,000.
After that unconditional victory, Bitcoin’s price soared by over $1,000 within just 24 hours (the chart above). Any attempts to strike back were beaten off severely. It is confirmed by the candlesticks with long shadows below that formed at almost the same level. I’ve marked them with red circles in the chart above. The manipulator masters technical analysis and protects one and the same level by creating a channel and attracting the crowd. It will finally help the manipulator to beat off sellers’ attacks.
So, who is this powerful manipulator able to push Bitcoin’s rate for so long and break other solid market participants?
The answer is obvious: Bitfinex! Its direct connection with Tether was proved long ago. Bitfinex was accused of manipulations using Tether in 2018 and 2019.
To prove it, you don’t need to be a detective or SEC’s agent. Just have a look at the emission of USDT.
The data on Tether coins issued in April and early May is in the table above. The source of information is Whale_alert.
So, Tether issued almost 2 billion USDT in 1 month, which is a record value. In general, it doesn’t look suspicious as USDT is the most traded stablecoin in the cryptocurrency market. But not a single USDT has been burned since April. It just can’t happen if parity needs to be kept. Demand can’t be constantly growing: someone will want to sell USDT to convert money to a fiat currency, even more so because USDT is very popular in the cryptocurrency world. The nature of stablecoins implies their peg to a fiat analogue. Tether is pegged to the USD. Demand for stablecoins isn’t stable. In order to keep the 1 to 1 parity between Tether and the dollar, the number of USDT must change all the time.
This process can be easily tracked if we look at other stablecoins, such as BUSD, PAX, HUSD, or USDC. Whale_alert shows emissions and burning too.
Have a look at the screenshot above. First, demand for HUSD fell and the cryptocurrency was burned; then someone wanted to buy another 1,000,000 HUSD and new coins were issued. Another argument which supports the theory that Bitcoin price is manipulated through USDT appears when we check Bitcoin to Tether rate on the days of USDT emission.
I’ve marked the emission dates with the blue dotted line in the chart above. There were no strong price drawdowns on any of the 17 days when the emission took place. What’s more, the biggest emission of USDT, equivalent to $0.5 billion, occurred on 28th and 29th April, on the eve of the biggest growth. This situation is marked with the red circle.
USDT hasn’t been backed by real dollars since 2019 and actually Tether can print as much “funny money” as they want. So, a new market bubble may appear.
Tether’s and Bitfinex’ motives are understandable: Bitcoin and other cryptocurrencies look “low-key” now when even global corporations’ securities backed by real assets have gone cheap.
The cryptocurrency market saw a big capital outflow during the crisis. So, cryptocurrency exchanges face a big outflow of clients, and Bitfinex is no exception.
Other trading platforms, mining pools and producers of mining equipment benefit from Bitcoin’s growth too. That’s why I wouldn’t blame solely Bitfinex. Tether is just a tool for manipulations here.
Also, remember that mining rewards will be cut two times after Bitcoin halving. Miners and the whole mining sector will suffer the most. Probably, the Bitcoin price must be 2 times higher to maintain the mining sector after halving.
Now it’s time to check the charts and update our scenario.
Actual forecast for BTCUSDT
Manipulator’s actions have been governed by the rules of technical analysis. It understands that a visual chart pattern will push the crowd towards necessary actions because most players know how to do technical analysis.
We remember that the big buyer started active actions on 28th April. Since then, a flat triangle with a clear resistance line at 9,400 USDT has been forming. On smaller time frames, we see buyers’ support near that level. Accumulation is taking place. They prepare the crowd for an upward leap.
On the H4 time frame, the triangle breaking target is at 11,200 USDT and is located at the figure’s bottom. The task is to break the maximum of the ultimate bullish wave at 10,500 USDT, at the very least. Pumping will most likely happen in the next few days, or even hours, amid artificial nervousness around halving.
A bullish scenario is likelier to be realized, but the manipulator’s main role isn’t limited to this. My hypothesis is that the buyer’s global task is to form Bitcoin’s bullish trend. If it is correct, the manipulator will strive not to allow the price to drop below 10,000 USDT. After halving, most buyers will be fixing profits. It will be important to follow the big player’s behaviour. If the level of 10,000 USDT is fiercely protected, then bulls can expect calmly a growth up to 14,000 USDT.
This scenario is shown in the daily chart above. Its probability isn’t too high, or else the manipulation will be obvious. SEC might wake up and initiate a new probe. I think there might not be any further growth. After consolidation at about 10,000 USDT, the manipulator will fix huge profits at the expense of those who believed in growth. Thus, a giant triangle will be drawn and its bottom will be the bullish wave of 2017.
But it’s another story.
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I’d like to remind you that all materials are provided for educational purposes only. They aren’t financial advice and don’t guarantee any profits. All trading decisions you make are your responsibility only.
Take care of yourself and your money!