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The Cartel, Manipulation and what it could mean for BTC pricesThis is going to be a rather lengthy post and you can take it for what you think it's worth. I have heard a lot of talk lately about a "cartel" being out there and manipulating the price of Bitcoin and other things. I want to look at the reason WHY any price manipulation would be happening. I also want to look what I feel are possible outcomes. My goal is to hopefully shed some light and understand the why behind things and to gain some PERSPECTIVE on your trades. Then we can make decisions from there on what we want to do. Firstly, you need to understand that a lot of companies have a hugely invested interest in crypto now that the space has matured over the last 10 years or so. I am not talking million dollar companies. But these are now BILLION dollar revenue CASH COWS collectively. From brokers, miners, mining companies, etc... It's in their best interest's not to let the price fall off the face of a cliff. It was estimated that coinbase made 1 billion alone last year. If crypto goes too low, they lose customers and in turn they lose their MILLIONS in revenue every month. To let Crypto die is NOT in their best interests. We need to understand that fundamental principle. The notion that CME caused that crash is kinda true, but for the wrong reasons. Crypto is about free market and anti-regulation. CME getting involved means regulation, banks, people who are the antithesis of crypto getting involved. All those early adopter crypto folks that were holding and saw that said, "Eff that, i am out" PLUS, how many MULTI millionaires were made at BTC 19-20k? A LOT. Price was just way to over valued. Before CME there were brokers that allowed you to short the market, look at this chart on Bitfinex, people were shorting it last year, well before CME came out. The only thing that CME had to do with the crypto crash is they were simply entering the space. That's it. That's all it took to make people bail on their positions. If there is one thing for certain, CME is NOT cartel just the scapegoat. People were shorting this thing well before CME got involved. In my opinion any group of people or "cartel" could range from a lot of different organizations. The goal here isn't to get into an argument on WHO it is, but to see WHY they would potentially be doing this. Now, why would a "cartel" be manipulating price to the downside? A. They want more assets at a lower price point. A group like this would want this so they can load up at lower prices so they can dump it again and make a ton of money. B. To accumulate cheap crypto. Organizations probably are loading up right now so they have reserves so people can buy, short, trade, etc... The lower price, the better to build up reserves. See, they don't care if crypto goes to 4k, they load up anywhere that it's lower. These large brokers make money whether crypto goes up or goes down. BUT, if you go to low, people lose faith in crypto and these companies lose money in the long run. A group probably is influencing price, but they don't need to continually do it. People in general are. "Cartel" just starts the process. All that had to be done was spread FUD at specific times to light the match of the self generating fire. Look at the chart of BTCUSD shorts. They keep increasing dramatically, why? People are buying into the FUD, but fundamentally crypto is only getting better. I am not here to tell you whether BTC is overvalued or not, that's an entirely different debate. The question I have is price action and risk. Why on God's green earth are people shorting it at these 6.5-7k lows? The risk-reward ratio is just not there IMO. Some are just hoping for the spike down and have a limit and have a tight stop, great! But why are we at this massive high in shorts? Do people really believe bitcoin is going to 0 with billion dollar companies backing it now? With some influential people behind it? If you do, god bless you for believing that. Continued below....
BITFINEX:BTCUSDLong
by Sherem
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