This is also not what I normally plan on blogging here about, but I noticed something and thought I would share. Bitcoin has been dropping pretty hard from when it hit the high of around $8500. As I am writing this, poloniex has BTC/USDT @ $7706 and falling.
The screen shot was taken before i started writing, so the price was a little behind.
Some of this is seasonal. Every year, or so it seems, in August, bitcoin drops during the European summer vacation season. It makes for good bargain hunting, but it also makes for a month long depression in the value. However, something more may be happening this year.
This may be a short term trough, like what happened on the 26th and 27th of July, but I have a suspicion it is not. Why?
Because there has been someone placing a 45 BTC sell order. This has never been, as far as I can tell, been breeched. No one seems to have the cash to remotely chew this away. Because of that, the sell order acts as a cost cap. The day traders need a spread to make their daily profit, so they sell below the cap and then place an order to buy significantly below that. This causes a downward pressure, but one that actually creates some stability since the drop by this is never more than a percent and then it swings back up in something of a sine wave.
However, this new individual, probaly using a bot, then waits until the the price has dropped a bit and then cancels his/her order. The order is reinstated as a much lower price. The day traders then push the price down again and then the cap gets lowered again. etc, etc, etc. Until the individual stops or someone comes along to buy up all 45 btc, over $300k, this is going to continue the downward spiral.
The question becomes, what is the person attempting to do? Selling the 45 btc as a block almost insurances it won't be sold. There are two possibilities, imo.
First this person is clueless. They have a lot of bitcoin and just want to dump it. They are just doing it badly because they don't have a clue about the market ingestion rate. However, that strikes me as less likely because if they didn't understand how btc works and the market works, I doubt they'd have accrued over $300k of btc.
The other possibility is the person is purposefully shepherding btc's price lower. The person's intent is to get BTC as low as they can and then swallow as much as they can at once. Once they have, the btc cap will disappear and the price will shoot up. The killer whale will sell and then rinse, lather, repeat until the market shifts so as to make the strategy not work any longer.
In the time that I took to write this, the cap dropped down to $7728 and the buy offers are at $7681. And falling.
How low do you think it will go? And what can be done about that cap?