As investor anxiety grows over the possibility of a new bearish cycle, the case for Bitcoin (BTC) to resume its halted upward trajectory has gained significant traction among top market experts.
Market analyst Ash Crypto recently highlighted several key factors, including demand and supply dynamics, a surge in US equities, and increasing inflows from exchange-traded funds (ETFs), suggesting that the current market conditions could favor Bitcoin’s resurgence.
Market Makers Accused Of Manipulating Bitcoin Prices
In a post on X (formerly Twitter), Ash pointed out that while US stocks are reaching new all-time highs, Bitcoin has struggled to break above the $117,000 mark, currently consolidating between $110,000 and $115,000.
He argues that this situation is not indicative of weak demand, but rather the result of an alleged situation that is gaining strength among analysts: manipulation by market makers and exchanges.
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The analyst further highlights that historical data show Bitcoin’s price movements were primarily driven by spot market activities. Buyers would purchase coins, absorbing supply and driving prices higher. However, today’s landscape is markedly different.
Ash Crypto suggests that the introduction of futures and derivatives has transformed how Bitcoin is traded. He alleges that exchanges discovered that creating synthetic Bitcoin contracts is often more profitable than dealing in actual spot Bitcoin.
The analyst notes that this shift allows undisclosed cryptocurrency exchanges to manipulate market movements using leverage and bypass the need for tangible Bitcoin.
What Historical Patterns Suggest
Ash pointed out that a situation indicative of this alleged manipulation was when Bitcoin recently touched $124,000, market makers and larger investors quickly shorted the asset through futures and exchange-traded funds.
This triggered a wave of liquidations for bullish investors that predicted a new leg up, causing the price of Bitcoin to plummet to the $107,000 mark only two weeks ago.
The analyst noted that although US equities are experiencing significant growth and liquidity is flooding into risk assets, Bitcoin is still caught in a cycle of manipulation that obscures its true value.
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In short, spot demand for Bitcoin continues to build, ETFs are steadily absorbing more coins, cryptocurrency exchange reserves are dwindling, and long-term holders are refraining from selling.
However, Ash Crypto notes that the presence of futures and derivatives for the cryptocurrency creates an “illusion of weakness,” reportedly designed to shake out retail investors from current market levels.
Despite the current challenges, he notes that the current bullish cycle remains intact. Historical patterns from 2017 and 2021 show that Bitcoin often experiences periods of suppression and sideways movement before exploding higher, suggesting a potential new price discovery phase ahead for BTC.
At the time of writing, Bitcoin was trading at around $114,969. It is still recording gains of nearly 3% and 6% in the seven- and fourteen-day time frames, respectively.
Featured image from DALL-E, chart from TradingView.com