Category Archives: Coinmetrics

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Study Says Lone “Committed Actor” Responsible for April Bitcoin Surge

Study Says Lone

Fresh research by crypto analytics firm CoinMetrics has added to speculation that the sudden hike in Bitcoin price in early April, that prompted the current revival of the cryptocurrency market, is all down to the actions of a single trader.

According to the company, among the many theories surrounding the event, one of the most plausible ones was that of a single entity that placed an order for about USD 100 million worth of Bitcoin across several exchanges. It said that “a single committed actor”.

It then proceeded to provide evidence to back up its theory by posting a series of Tweets on its official Twitter account, beginning with the assertion that there was no news of significant impact during the one hour of the event, a time that was also normally very low in trading volume.

On April 2, 2019, Bitcoin’s price increased from roughly $4,200 to $5,000 in a span of one hour. There was no impactful news released during this time.

— CoinMetrics.io (@coinmetrics) April 17, 2019

It observed that most of the volume happened on HitBTC exchange on the BTC/USDT market. It also, however, does not rule out HitBTC’s action could have been due to wash trading. The large trading amounts were then observed on Coinbase, followed by Bitfinex. All three are among the world’s most active exchanges for Bitcoin.

It provides several charts to support their claim:

The large price movement on April 2, 2019 occurred during the window of lowest global liquidity. It began at 04:30 UTC and lasted until 05:30 UTC. This time may have been deliberately chosen so that a committed actor could maximize price impact when trading. pic.twitter.com/vktxpGBwlQ

— CoinMetrics.io (@coinmetrics) April 17, 2019

A video showing the full history across all exchanges also shows a remarkably similar pattern happening on all three platforms:

Here’s a fuller history of those three exchanges pic.twitter.com/j3KJxtr60h

— CoinMetrics.io (@coinmetrics) April 17, 2019

CoinMetrics concluded that a bull run could very well be on the cards, but that it was too early to say if a rally was already underway.

 

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Are Bitcoin Miners Expecting an End to the Price Rally?

Atypical trading patterns from Bitcoin miners indicate they are expecting the price rally to soon come to an end.

While it is not uncommon for miners to sell off a portion of newly-gained coins to cover operating costs, the extent of their sales suggests they are looking to sell before their work becomes less profitable. Reports indicate that in the month of June and the majority of July, the average miner was, in fact, working at a financial loss.

What is particularly unusual about the sales from miners is that the last 24 hours have seen them sell more Bitcoin than they created. They reportedly mined an aggregate of approximately USD 14.4 million in coins, selling a total of USD 17.3 million. Recent trends from the miners show that they have tended sell around the USD 10 million mark of their holdings, averaging less than their daily earnings.

An end to the rally, or just covering costs?

Alternatively, if miners are not expecting an end to Bitcoin’s rally, perhaps the last few unprofitable months have required immediate sales to cover the growing overhead.

Kyle Samani, a managing partner at Multicoin Capital Management weighed in on the subject, speculating that it was likely many miners are currently no longer waiting for a price appreciation to sell, although he did not share any particular reason as to why this might be.

The co-founder of analytics provider Coinmetrics Nic Carter filled this gap by suggesting that miners could not afford to not sell all of their freshly minted coins right now due to the recent relatively low prices. Coinmetrics also suggests that many miners have left the market since Bitcoin’s price highs of December that saw the cryptocurrency reach nearly USD 20,000.
Bitcoin has managed to jump 40% since the start of July, hitting USD 8,000 this week and recovering to May price levels.

 

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