Bitcoin price analysis: BTC/USD recovers from Wednesday's lows; the crypto bubble might have been engineered, research shows


  • 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

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

MATIC price goes cold, as Polygon financial metric offers an interesting twist

MATIC price is up 47.66% since July 21, establishing one of the better rallies in the cryptocurrency complex over that time. The rally has placed Polygon at the junction of the symmetrical triangle’s apex with the 50-day SMA at $1.07. 

More Polygon news

Cardano price action and on-chain metric collide, reveals a complex situation for ADA

The price staged a rebound in Jul after dropping near the 38.2% Fib retracement at $0.971, marking the fifth consecutive month of a bullish reversal from the level. ADA has shaped a head-and-shoulders pattern with a measured move of approximately 60%.

More Cardano news

VeChain Price Forecast: VET postures for a 40% gain as energy builds

VeChain price has built on the rebound from the 50-week SMA, registering a 15.21% gain last week and closing July with a minor decline of -1.64%. The persistence of the Anchored VWAP has been containing a rally continuation since the July 26 high.

More VeChain news

Three reasons why Shiba Inu price will quickly drop 45%

Shiba Inu price has trended lower in a descending parallel channel since the May crash, offering only brief opportunities from low probability patterns or setups. The weak performance is a marked deviation from the extreme price events in early May.

More Shiba Inu news

BEST CRYPTO BROKERS/EXCHANGES



Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast

BTC

ETH

XRP