This week on Planet Bitcoin - 22 September 2016

Friday 23 September 2016

TL;DR whales will be whales...

This month has proven to be a textbook example of what happens in thinly-traded and unregulated markets. Bitcoin has always been susceptible to whales playing games with the market, pushing the price around for their own gains (or sometimes, even just for fun).

At the beginning of September, the market spiked by around $20 from the level it had settled at after the fallout from the Bitfinex hack. That was enough to give traders the confidence to lift the price back over the psychologically important $600 mark, and the rally continued, including a sharp $10 lift that helped it challenge the $630 line. The chart clearly shows the short period of time in which these movements occurred (and it’s evident on the 5-minute timescale, too), demonstrating that these were very likely down to a single large trader placing a massive bid at market prices.

Chart

It wasn’t to last, and perhaps given the blatant manipulation that carried the price up to its highest point since the beginning of August, that shouldn’t be surprising. The market had just touched $630 when a huge sell order dropped it back below the $600 mark. It swiftly recovered, though traders with their fingers burnt were reluctant to buy above $610. After ten days of horizontal movement, another crash - again, recorded in a period of minutes or less - took the price of bitcoin back below $600, where it remains for the time being.

Around the bitworld

Gemini, the licensed bitcoin exchange launched by the Winklevoss twins, has announced it will be holding daily auctions. These will allow customers to ‘Execute a large trade size similar to over-the-counter (OTC) trading quantities on the exchange without having to worry about price slippage. This is a critical benefit for customers concerned with exchange liquidity.’ (After the recent spate of deliberate slippage, it will be interesting to see how many clients take them up on the new service.) ‘Our first auction in BTC/USD will occur today at 4:00 p.m. Eastern Time. Future auctions will occur every day (including weekends and holidays) at 4:00 p.m. ET, and we’ll be offering auctions for our other trading pairs in the weeks to come.’

The alts have seen enormous volatility this week, too, with many posting double-digit swings in both directions. Monero has seen significant fluctuation, in particular. The release of full node code on testnet for Waves has given the market some confidence; full public network is expected within the next week or so.


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