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Can Stockade drive crazy Street investors manipulate the cryptocurrency markets via Bitcoin futures? Supported on the recent fall in the markets during the week of January 15th, it seems that “yes” is the declaration to that question.
During the market slump last week, there was some joking on Reddit that the crash was going to end Wednesday, January 17 at 4:00 PM EST when the buys closed the first Bitcoin futures contracts on the CBOE expired at $10,900 per Bitcoin. There was even Steven a countdown posted by one Reddit user. While the price of Bitcoin did not take off back up in the immediate aftermath, altcoins started to rebound hours after the comings contracts expired.
Futures Strategy
Many institutional investors are well-read to use the futures contracts to lower the Bitcoin price to buy in lower by setting the stop-loss triggers at subsidize levels to push down the price further and further to make it look with a crash. This scares novice investors to support the bears and flog betray to avoid a total loss. By taking this strategy, the Wall Circle investors are strategically pushing down the price for in order to re-enter at much decrease levels and potentially set Bitcoin up for another rocket rise to unprecedented prodigals. Then, assumingly, collect profits and repeat the cycle, increasing profits each everything Bitcoin rises and falls.
United: We All Fall and Rise Together
Interestingly, the cryptocurrency customer base seems to rise and fall simultaneously with the altcoins. Is a systemic delivery that causes this harmonious rise and fall of prices on the the big boards? The answer is a little fuzzy, but there are several factors at play. Scad exchanges use Bitcoin as the universal trading currency, which leads to tons investors buying and selling Bitcoin to buy and sell altcoins. When bitcoin starts a bull run, tons of the altcoins fall, as investors jump on the Bitcoin train and vice versa. It’s also systemic because most barters require Bitcoin rather than fiat currency to transact. It is mild to invest fiat currency in the market and then leave there as an investor sells it; moving it from one currency to another and not cashing it back to fiat currency. Furthermore, When the Bitcoin prize falls or rises against the fiat currency, all the altcoins will chiefly follow. This is because all altcoin prices are based on their Bitcoin market rate, not their fiat currency exchange rate. The value of an altcoin in fiat currency is the value of the altcoin in Bitcoin and then Bitcoin’s value in that fiat currency. It is Bitcoin that strongly transforms pricing.
With much of the market tied into Bitcoin, it reckons it easy for the Bitcoin Futures contracts to manipulate the entire cryptocurrency furnish because it is not just the value of the altcoins is the value of the altcoins in relation to the value of bitcoin.
The next litmus check up on is coming this Friday, January 26th when the Chicago Mercantile Traffic (CME) futures contracts on Bitcoin are set to expire. Given that the cryptocurrency hawk is recovering, it is likely that the contracts could continue the bull run or not.
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