I don’t have a personal stake in Bitcoin, or any crypto, but I am tracking this very closely because I think there’s a relationship between buying and selling in the crypto space and the broader markets.
Also, every bubble needs two things; (1) a good story and (2) ample credit.
Where it’s #2 that explains the connection between price movements in crypto and other markets (both are/were floating on a sea of ample credit), it’s the loss of #1 that will be necessary to fully insert the killing pin into the side of the Everything Bubble.
TSLA is still a story stock. There’s no fundamental way to explain the difference in market cap between TSLA and VW or Ford. In fact, there’s a counter argument to be made there.
At any rate, my theories here in regards to Bitcoin, et al., is that if/once the story breaks down, that may well lead to a more widespread understanding that the emperor has no clothes.
One way to really kill a story is to reveal the extent to which the story was bogus, and nothing screams “fraudulent!” quite like fraud itself.
While there may be other hotspots of fraud, I’m convinced that Bitfinex & Tether constitute a raging dumpster fire.
Maybe there are clues in the recent price/volume chart of Bitcoin?
Notice that on the decline of Nov 14 and 15 there was a wall of volume that tracked it. It culminated with a final buying burst marked by the red dotted line.
It sure looks like somebody was super interested in arresting and reversing that dip below $5,500. Based on all of the forensic work already done on Tether I’d be less-than-surprised to discover that another mysteriously well timed burst of tether issuance and utilization accompanied all that.
But…now look at the volume coming into this most recent decline. It’s of similar size but now it’s simply leading to selling.
My speculation is that the Bitfinex/Tether fraud has finally broken – perhaps the principals are busy fleeing to a non-extradition jurisdiction even as I type this – and we’re just waiting to hear about it.
Again, just speculation.
When/if the Bitfinex/Tether scam breaks open, that will be a certifiable “story killing” event that may well spread beyond the borders of cryptotown.