HomeCryptoBitcoinNicholas Merten: "the price of bitcoin is too influenced by whales"

Nicholas Merten: “the price of bitcoin is too influenced by whales”

According to crypto analyst Nicholas Merten, the negative trend of the price of bitcoin in the last period has been caused by the so-called whales, meaning addresses that have a significant amount of a given cryptocurrency.

Merten argues that some big whales are trying to manipulate the price of bitcoin in order to make a profit from simultaneous leveraged trading:

“It’s a few people who are coordinating these prop ups of the market and dumps in the market. And they’re actually not really competing against you. In fact, they’re actually trying to compete against one another. Because really, anyone can do this. If you have enough Bitcoin, what you do is you manipulate the spot market and then you trade on margin on exchanges like BitMEX. So if I have enough Bitcoin to push Bitcoin’s price down $600… I might incur some slippage in the process. I’m going to, for example, sell a lot of my Bitcoin through this price range clearing through the order book. But what I’m actually trying to do is I have another position on BitMEX that’s trading on leverage – 10x leverage, 10x leverage, meaning I’m trading with 20 times the capital. So even though I might incur the cost of trying to push the price down, I might be shorting Bitcoin on margin and be making a fortune.”

Merten points out that it is possible to see the massive movement of the whales from a particular movement of the bitcoin price graph:

“Here’s the thing though, have you ever noticed that sometimes when we get these Bart charts, we very commonly will have a switch in the trend very quickly or sometimes as soon as a few minutes after, where basically we’ll get a prop up in the market and price will deplete back down. That’s exactly what happens. It’s the fact that a lot of these whales are competing against one another. That’s why a lot of them don’t take the risk 24/7 to simply try to do this. They’re dealing with very large positions and they’re coordinating behind the scenes. It’s a select few parties who do this kind of stuff. I don’t know who they are, but it’s exactly what you’re seeing in the price.”

 

Nicholas Merten bitcoin

Although in the short term it may be feasible, Merten is convinced that in a long-term perspective it will not be easy to achieve the same price manipulation effects on bitcoin.

“They can do things in the short term. The longer-term are driven by either a wave of retail or institutional liquidity, more people getting into the cryptocurrency space, more utility being found in the space, whether it be through store of value, transfer of value or through all kinds of other use cases through the altcoin space. It doesn’t matter. What we’re focused on looking here is looking for optimal periods to average in. At least that’s what I’m looking for right now. And what I’ve talked about is that anything in this range [between $7,000 and $8,500], I’m eager to buy.”

This situation has also been made possible and affordable for everyone because several platforms have started to provide support for margin trading, including for example Binance.

Alfredo de Candia
Alfredo de Candia
Android developer for over 8 years with a dozen of developed apps, Alfredo at age 21 has climbed Mount Fuji following the saying: "He who climbs Mount Fuji once in his life is a wise man, who climbs him twice is a Crazy". Among his app we find a Japanese database, a spam and virus database, the most complete database on Anime and Manga series birthdays and a shitcoin database. Sunday Miner, Alfredo has a passion for crypto and is a fan of EOS.
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