After the influx of major institutional investors into the cryptocurrency market in 2020, the crypto market is witnessing a significant price manipulation. In the first few weeks of 2021, we see an institutional-grade bitcoin price manipulation. In the near term, bitcoin’s parabolic rise is unsustainable. We saw bitcoin exceed the target technical upside of $35 000 and even touched past the $40,000 mark.
At the time of writing this post, bitcoin is trading below $35,000, and it is enough to start the manipulation debate. According to Scott Minerd, Global Chief Investment Officer (CIO) at Guggenheim Partners, “now is the time to take some money off the table.” This was hours ago, after the dump in the price of bitcoin.
During Minerd’s interview with Bloomberg TV on December 16, 2020, he stated that bitcoin’s fair value could still increase. He specifically quoted that their actual work showed that bitcoin should be worth about $400,000.
In late November, Crypto News reported that Guggenheim filed to the American Securities and Exchange Commission (SEC) to reserve the right to invest up to 10% of its $5.3 billion Macros Opportunities Fund in the Greyscale Bitcoin Trust. The filling is expected to become effective on January 31, 2021.
United States based investment giant JP Morgan called the recent bitcoin rally an unsustainable speculative mania. However, the investment giant has set a long-term theoretical target of $146,000 per BTC. According to the CIO of AMDAX Asset Management, Marcle Burger, the long-term $35k is likely nothing. However, he pointed out that considering how fast BTC exceeded $40K, a more extensive correction should be expected.
Institutional-grade Bitcoin Price Manipulation
Some analysts claim that institutions are doing what they have always done, manipulate the bitcoin price. They cited institutional-grade bitcoin manipulation as the root cause of the dump we see in the bitcoin market. These institutions extol the value of bitcoin when they want to sell and say it is overpriced when they want to buy.
As BTC becomes more integrated into institutional portfolios, external events might have a growing impact on its price. In the last 24n hours, 245,092 trading positions worth $2.56 billion were liquidated, according to data from bybt.com. As of writing this post, BTC’s price is down by about 13%, trimming the weekly gains to less than 11%. Meanwhile, BTC rallied by 88% in a month and 329% in a year.
What Does It Hold For Traders?
With the increasing impact of institutional investors in the crypto market and bitcoin, traders must tread carefully. The bitcoin market’s current volatility calls for a “sixth sense” if you must make gains and minimize losses. As it stands, there is no saying the direction of bitcoin in the coming days or weeks. However, this is certain; there will come another bull run followed by a bear market. The trend continues in this manner, and there is no end in sight.
Whether you agree, there is institutional-grade bitcoin price manipulation or not, invest the money you can bear to lose. The crypto market is highly unpredictable, and we all need to tread with extreme caution.
Okereke has a passion for researching blockchain and cryptocurrency. He enjoys creating long form educational content to inform others on the opportunities in this space.