Bitcoin’s recent price struggles have led to speculation about market manipulation. Analysts claim that spot Bitcoin exchange-traded funds (ETFs) are being used to “liquidate” traders, but is this theory supported by evidence? Experts weigh in on the possibility of massive market manipulation and its impact on cryptocurrency prices.
According to technical analyst James CryptoGuru, large-order executions in cryptocurrencies can drive down Bitcoin’s price, benefiting those who accumulate assets at discounted prices. However, such strategies carry significant risk, as price movements during weekends and overnight sessions don’t always align with trends once US markets open.
Other analysts point to the role of “whale chat groups” using sophisticated bots and “war chests” exceeding $100 million in coordinating price drops. While these theories are unproven, they cannot be ruled out. Strong incentives exist for market players to front-run each other rather than act collectively.
The same logic applies to traditional markets, where firms like Vanguard and BlackRock control 57% of open-end mutual funds and ETFs. Their trades can influence markets across stocks, bonds, and commodities. Large entities may have privileged access to liquidation levels and hidden orders on exchanges, but this is not necessarily illegal, especially when it comes to cryptocurrencies.
The $35 million aggregate order book depth for Bitcoin spot trading on major exchanges like Binance and Coinbase makes it difficult for market manipulation to occur. Moreover, the correlation between Bitcoin and altcoins is high due to its dominant market share, which keeps its price movements closely tied to those of other assets.
While some speculate that bots are used to operate across multiple tokens, this is an accurate description of the current market dynamics. The price of Bitcoin is expected to break out of its tight range soon, and altcoins will likely follow. However, the significant order book depth and correlation between assets make it challenging for market manipulation to occur.
This article is for general information purposes only and should not be taken as legal or investment advice. It’s essential to approach such claims with a critical eye and consider multiple perspectives before drawing conclusions.
Source: https://www.tradingview.com/news/cointelegraph:f749c1c59094b:0-analyst-says-spot-bitcoin-etfs-used-for-massive-market-manipulation-is-he-right