• Bitcoin up nearly 3% since the beginning of the day, capped by $6,500.
  • Research shows, that Bitcoin price was inflated artificially.

BTC/USD is changing hands at $6,480, the price of the digital coin No. 1 recovered strongly from a new low reached late on Wednesday at $6,154. The coin gained nearly 3% since the start of the day amid growing trading volumes.

Fake bubble?

At the end of May the US Department of Justice launched an investigation into Bitcoin price manipulations, now academicians have joint the blame game. John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student published a research paper that reveals that half of the Bitcoin price increase might have been orchestrated by a handful of big players. 

The researches analyzed the flows of digital tokens in and out of Bitfinex, one of the largest and least regulated exchanges in the industry, and revealed some clear patterns of successful manipulations aimed at pushing the price higher

"There were obviously tremendous price increases last year, and this paper indicates that manipulation played a large part in those price increases," Mr. Griffin said, as quoted by The New York Times.

The researchers sift through millions of transaction record available in public ledgers and came to the conclusion that a secondary virtual currency, known as Tether was used for that purpose. They found that half of the increase in Bitcoin's price in 2017 could be traced to the hours immediately after Tether flowed to a handful of other exchanges, generally when the price was declining.

Bitfinex declined the allegations.

Bitcoin's technical picture

From the short-term perspective, BTC/USD recovery is capped by $6,500. If this level is broken, the upside may be extended towards $6,572 (100-SMA, 30-min chart) with the next bullish aim $6,700. On the downside, the local support is produced by 50-SMA (300min chart) at $6,414 and followed by $6,300. Once it is broken, Wednesday's low at $6,154 will come into view once again.

BTC/USD, 30-min chart


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

NEAR protocol could see a rally as it sets out to launch an AI smart contract builder

NEAR protocol could see a rally as it sets out to launch an AI smart contract builder

Near protocol (NEAR) co-founder Illia Polosukhin stated in a social media post on Wednesday plans for NEAR to launch NEAR AI, a user-owned AI system that will allow users to build web3 apps without code on an end-to-end network.

More Near News

US House of Reps passes bill aiming to regulate cryptocurrencies

US House of Reps passes bill aiming to regulate cryptocurrencies

FIT21 bill received massive support as the House of Representatives voted to pass the bill on Wednesday. The White House and US Securities & Exchange Commission (SEC) Chair, Gary Gensler, expressed concerns about the potential impact of the FIT21 bill on investor protections in a statement.

More Cryptocurrencies News

Ethereum bulls await ETF approval as BlackRock, Bitwise, Grayscale submit amended ETH ETF filings

Ethereum bulls await ETF approval as BlackRock, Bitwise, Grayscale submit amended ETH ETF filings

Ethereum (ETH) is trading sideways on Wednesday as BlackRock, Bitwise and Grayscale submitted their amended 19b-4s filings to the Securities & Exchange Commission (SEC). The agency has also begun conversations with issuers on S-1s applications.

More Ethereum News

As Ethereum spot ETF approval nears, these altcoins could explode

As Ethereum spot ETF approval nears, these altcoins could explode

It is not surprising that altcoins related to Bitcoin saw a major rally post-Bitcoin spot ETF approval. Likewise, tokens closely related to Ether could ride the ETF approval wave. Ethereum Classic, Pepe, Floki and other DeFi tokens could gain momentum as the ETH ETF approval deadline nears. 

More Cryptocurrencies News

Bitcoin: Is BTC out of the woods? Premium

Bitcoin: Is BTC out of the woods?

Bitcoin price shows signs of continuing its uptrend, providing a buying opportunity between $64,580 to $63,095. On-chain metrics forecast a bullish outlook for BTC ahead. If BTC clears $70,000, the chances of resuming the uptrend would skyrocket.

Read full analysis

BTC

ETH

XRP