Does Tether (USDT) & Bitfinex Exchange Still Play a Role in Driving Bitcoin (BTC) Price?
Bitcoin surged more than 20 percent on April 2nd, 2019, going from roughly $4,200 to about $5,055 level, the largest intraday price rise since December 2017.
Though this has been attributed to short squeezes or April Fool joke, the analytics and research firm Coin Metrics and provider of institutional trading tools for digital currencies Trade Block, suggests otherwise.
Coin Metrics’ theory is that a single committed actor went long and traded in such a manner that maximized the price impact. It further stated that the price started moving at the point where global liquidity has been at a minimum.
Though it can’t be known for sure, trades like such would have been designed to trigger the stop losses and force a short squeeze via liquidations of margin and short futures positions.
It all started in the Bitcoin-Tether market on HitBTC with a “matched trade of 122 Bitcoin at 04:23 UTC. This is equivalent to an order of approximately 500,000 Tether sold in one transaction.”
After this large trades were then observed on the BTC-USD market of Coinbase followed by BTC-USD market at Bitfinex. Moreover, the large price movement occurred during the “window of lowest global liquidity” that began at 04:30 UTC and lasted until 05:30 UTC.
Here's a closer look at our three exchanges of interest pic.twitter.com/yFgxBG2EEM
— CoinMetrics.io (@coinmetrics) April 17, 2019
Meanwhile, in its recent blog, Trade Block analyzes that the price rally most “evidently” began at Bitfinex, Coinbase, and Kraken, with Bitfinex transacting the majority of the activity during this rally.
Their analysis indicates that the “vast majority of trading activity (~51%) that occurred during the initial spike in volume was executed at Bitfinex,” and “there was a significant increase in trade executions and volume at Bitfinex that was recorded very close to the start of the initial price run.”
It further reported that Bitfinex gained the greatest market share that is 51 percent of the total BTC trading market share across US exchanges as well during the initial price spike. Moreover, the number of trades executed at Bitfinex has been also significant during this short period.
Previously, crypto exchange Bitfinex and Tether both have been involved in controversies associated with Bitcoin price manipulation and this time as well they seem to play a part in Bitcoin’s more than 20 percent surge in early April as per the reports from both the firms.
What are your views on Bitcoin and Tether's involvement in Bitcoin price movement?