Bitcoin [BTC]: Whale trading, not Cost manipulation is responsible for market’s wild volatility


Bitcoin [BTC] gave birth to possibly the most volatile marketplace in modern trade, after which several concessions were made immediately from scratch. Since the crypto-ecosystem witnesses additional mainstream approval, the market’s underlying’swing’ character is currently being questioned, mostly by the consumers that suspect willful cost manipulation. Against popular belief, nevertheless, among the chief reasons supporting the occasional spikes could result from big buyers/sellers making trades on the market.

One market volatility speculation surfaced Reddit and alleged that subway trades were a moderate for large traders to leverage liquidity. Consequentially, a transport of a couple million dollars by one whale could go the whole marketplace by +/- 5 percent, the Redditor claimed.

Source: Blockchain

The chart above shows the average trade value and its immediate effect on crypto’s value. The summit of this chart also coincides with the specific period BTC violated the 9,000 mark.

the primary reason for such behaviour is that whales can’t market 10,000 BTC within a market. They can, however, purchase 2000 BTC within a market, create a rise in price, then market their currently 12,000 BTC on OTC in the controlled price. Connected to manipulation, mainly only exceptionally large investment classes get into add liquidity to the marketplace.  Since this type of move is commonplace at the cryptospace, whales wind up earning gains in USD while opening the marketed BTCs available for sale on the open market.

Whether the seller/buyer plans it, a lot of different ways exist to control the trading cost, at least till exceptionally large investment collections stay to add liquidity to the marketplace.  On the reverse side, the past has proven that $100m of trading has led to the market to pump 25percent from $4,000 to $5,000 within one hour. As a hint, if the OTC market has dried up and very low liquidity means you can not market, it means it is time to margin search.

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