Bitcoin Weekly: Manipulation Probes

Another choppy week in the world of Bitcoin. We are at a point of indecision where the market is deciding whether it wants to change direction and make a higher high or continue it’s downtrend. This is clearly visible from the indecision candles that we have been seeing for the last couple of weeks. On the news side of things we have started to see a stronger negative sentiment being built. Some of the biggest pieces of news to hit the market this week were:
 

Criminal Probe into Bitcoin Price Manipulation

Price manipulation on the crypto markets have been one of the risks traders have had to take when trading these markets. Given that exchanges have very low to no compliance policies in place, we regularly have seen massive pumps and dumps in the market. Whales have been accused of spoofing the market by putting up very large sell or buy orders that they never intend to go through with. This week the Justice Department in the US opened a probe into this manipulation accusations. 
 
The move has been actually received favorably by the large institutional investors interested in the space. With greater regulation of these markets the larger players have greater confidence in the entering the markets. The crypto market however didn’t react favorably to the news. The markets took a sharp down turn at the start of the week as the news was announced.
 

Coinbase Acquires Trading Platform Paradex

It seems we can’t get through a week without Coinbase making a big announcement. The speed at which the company is growing has been remarkable to see. Leadership at the company continues to make strong moves into key areas which will have a huge impact in the years to come. This week it was all about the acquisition of a trading platform Paradex. One of the key questions that has been regularly asked of Coinbase is when are they going to be listing more currencies on their platform. Speculation of listing has sent price of certain coins skyrocketing given the exposure they would get from being on the platform. 
 
Paradex which is a decentralized exchange offers the trading of hundreds of coins however. The acquisition is paving way for Coinbase to open a bulletin board for crypto. For those unfamiliar with Bulletin Boards, the US has a separate listing for micro cap and penny stocks which is very similar to this. SEC warns investors about investing in these assets due to the high level of potential manipulation. This vehicle will absolve Coinbase of all risk of fraud and at the same time give their customers the ability to buy from a large basket of currencies. 
 

TruStory Aims to Identify ICO Scams 

 
An interesting project raised $3m from some of the most notable investors in the valley this week. The project has an interesting premise where they are hoping to build a protocol that will use the blockchain to validate claims before a piece of news or information is published. For example if a team is wanting to launch an ICO and claims that their team members have worked previously in Google or Coinbase etc, it would need to be validated first by the network. This way investors will be able to use the same protocol to look up whether a piece of information has been validated. 
 
The core premise of the idea is interesting. The founder has experience working at Coinbase, a16z and Goldman Sachs. Which gives her a unique perspective on solving this problem. Interestingly enough like most company launches in the blockchain space today, they chose to skip the ICO stage initially and raise capital in the form of equity. This is a healthy sign and hopefully when they do launch their tokens they will be businesses with actual financial models. 
 

Celebrating the 9th Bitcoin Pizza Day

On May 22, 2010, now known as Bitcoin Pizza Day, Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John's pizzas. Coin Telegraph did a nice inforgraphic showing how much one of those pizza’s would be worth today:
 

Bitcoin Technical Analysis

Last week we mentioned this 4hr chart that we were watching very closely. We attempted to break out of the channel at the beginning of the week however news about the criminal probe stopped the rally right in it’s track and once we could that key support level we found ourselves back int he channel. This has setup several short and long opportunities for day traders. However for people investing with a longer term time frame it would be best to sit on the side lines till we find ourselves a bottom that we can work with. 
 
At the moment the bears are fully in control and if we see a break of the 7.2k level we could see more downside in the week to come. 
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