Bitcoin drops around 15% in biggest single-day loss since 26 June
Bitcoin has taken a plunge, but still has a fair way to go before it's not broadly rising.
The markets have gone red over the last 24 hours and Bitcoin has posted its biggest single-day loss since it plunged from $14,000 on 26 June (depending on your timezone). The shift saw it drop over 14% in just a few hours, and in the last day it's gone from highs of about $13,200 to lows of around $11,550.
The good news and the bad news
The bad news is that Bitcoin is now trading down at under $12,000 when just hours ago people were deciding what colour Lamborghini they'd get. The good news is that Bitcoin hasn't yet invalidated its rule of stepping to higher lows. Until it's sub-$10,000, it's still quite clearly moving upwards.
So, did anything in particular cause this or is it just the market doing market things?
There are a few possible bits of news which could have spooked the herd.
One is that someone tried to mine an invalid Bitcoin block.
Bitcoin had an invalid block at height 584,802, as spotted by @juscamarena
All 8 nodes at https://t.co/WKQ8hPDGON identified the block as invalid:
Bitcoin Core 0.18.0
Bitcoin Core 0.17.1
Bitcoin Core 0.16.2
Bitcoin Core 0.10.3
Bitcoin Knots 0.14.2
— BitMEX Research (@BitMEXResearch) July 10, 2019
The appearance of bugs, theft or other misadventure is bad news, but this seems to be a bit of a non-event. As BitMEX noted, there was a mild price drop which corresponded with this event, but it is almost certainly unrelated.
Another incidental correlation is that Bitcoin was just a fraction of a percent shy of its highest market dominance since 2017 when the markets started to turn, and Bitcoin dominance slightly turned with it. It could be that there's some kind of invisible market force in action between Bitcoin and altcoins, but it still seems more likely to be a coincidence.
A more likely culprit may be that the Bitfinex-Tether case isn't finished yet. New filings from the New York attorney general's office have made the case that – to paraphrase – Bitfinex and Tether have been acting naughty. It's possible that people are trying to head to the door before anything happens.
That said, the Tether printing press is still going strong.
There have been two massive $100 million printing runs yesterday and the day before, now reflected in the Tether market cap (green line).
Based on the energy of the recent Tether printing run, someone might expect a decent upwards bounce after the dust has settled on today's fall.
On the exchanges
But it's tough to discount the theories of price manipulation, especially given the deliberate-looking market dumping being carried out by at least one clown whale, in the form of underpriced Bitcoin sell orders.
Indeed, the last week has definitely been marked by whale action.
The table below shows hour-by-hour Bitcoin trading volumes on Kraken in yellow, Gemini in grey, Coinbase in pink and Bitfinex in green.
It doesn't include a lot of exchanges, such as Binance, but it's also a relatively clear (and pretty) way of contrasting the regular activity of Coinbase and Gemini with the much more abrupt whale moves of Kraken and Bitfinex. It's perhaps not coincidental that Kraken and Bitfinex are believed to be key ramps for Tether.
Disclosure: The author holds BNB, BTC at the time of writing.
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