Bitfinex laid an egg. Of course, Wells Fargo Bank did all the heavy breathing. And, then the price explodes to an all time high. But... it's not real. In fact, it's price discovery chaos all over bitcoin world. Let's dig a little deeper.
I have been reporting for months and months that there is a war going on between the PBoC and the Chinese bitcoin exchanges. They shut down withdrawals into the Yuan under the guise of preventing crime. You see, only governments can be criminal... legally. Then Xi eats chocolate cake with the Trumpster and magically the war expands to the "Peoples Bank of USA", aka Wells Fargo.
The price discovery chaos is because the bank battles have been scattered and not uniform. Therefore investors at various exchanges are reacting differently.
Should we collectively panic? Some think this is a Bitfinex solvency issue and they are running for the exits. This will subside if Bitfinex is telling the truth about their solvency. Will the war spread? BTC-e and BitStamp are reporting fiat transfer problems in a different way but the timeline is the same. So yes, the war is spreading. Is this the end of the world?
I remember the day when the easiest way to get bitcoin was to meet a stranger at Starbucks and exchange a wad of cash over a laptop. We can go back to that. They can't stop us.
When and where is the price of bitcoin going? Look at the volume line on Bitfinex. We are seeing a huge divergence between price and volume. This ends badly for the buy and hold crowd. Price will plummet dramatically when demand drops due to A: all of the investors running for the exits have exited or B: Bifinex solves the fiat transfer problem. So I look at the situation as no more than panic buying in a blow-off top scenario.
I remain Neutral on BTC because I cannot tell you when these events will happen. The price will continue to rise until it happens and then tank.
Despite the Bitfinex premium anomaly, all exchanges are approaching life time high values. Logic would dictate that if investors were escaping from bitcoin, valuations would drop on all exchanges. The opposite is taking place. I am starting to think we are currently seeing a major market inflection point. Brewing is massive negative fundamentals and massive positive fundamentals. Currently the positives are winning the valuation side of the equation. Volatility is spiking. Currently the negatives are winning the volatility side of the equation. Here's the analogy, driving a car at full speed up a mountain, accelerator is pressed to the floor. What you don't see is the cliff on the other side of the next turn. A cliff with no bottom.
KLYP_Investment
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why don't you consider nowadays big brother samurai chart?
investigator
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@tlzkrh1029, I have no idea what you are talking about.
captrade
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But china man was making much of the higher volume and thus wasnt a genuine indication of volume?
investigator
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@captrade, The volume for China shows up in the BTCCNY chart. China general does not trade the BTCUSD pair where it is usually US investors. I have pointed out in past discussions that the dotted red price trend line is the China trade. The China trade trend is distinctly not related to BTCUSD volume. China volume was huge when Chinese exchanges were not charging trading fees. The PBoC put a stop to that and China volume dropped down to small numbers.