Analysis: Accusations of “Binance manipulators” don’t hold water

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MarsBit
09-30
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Mars Finance News, according to Cointelegraph, conspiracy theories and scam rumors are quite common in the cryptocurrency industry, but sometimes retail traders who get a lot of information from social media simply lack basic market knowledge. For example, recently some well-known cryptocurrency market analysts discovered a so-called "Binance manipulator" who trades Bitcoin futures, which is allegedly one of the main reasons why Bitcoin was blocked at $66,000 and subsequently retested the $63,500 support level today. Despite undeniable evidence of a large number of quotes and transactions, some unconfirmed assumptions and flawed assumptions have led people to believe that the entity is effectively trying to depress the price of Bitcoin. Even assuming that the same entity has made multiple large quotes on the Bitcoin futures order book, it is impossible to know whether it uses other accounts to make purchases.

It is common for large trading desks to have separate investment vehicles for arbitrage and long-term holdings, and this is not illegal, and is not uncommon even for traditional asset managers and hedge funds.

Therefore, one can use the apparent large volume of bids (known as spoofing) to create fear, uncertainty and doubt while secretly buying these contracts. Essentially, the investor looks like a large seller, when in reality the entity is a net buyer of derivative contracts - the increase in Binance open interest supports this theory.

Another source of conflicting data is on the buy side, with order book analysts observing that entities added over 4,000 BTC worth of buy bids on Bitcoin futures following a breakout of the $64,500 support level.

The data thus paints a picture of large entities of seemingly similar size vying for control, but as investors have been forced to take profits, Bitcoin prices happen to be trending lower as S&P 500 futures indicate a pullback and news flow is biased towards the bearish side with major economic publications highlighting stagnant global growth and tensions in the Middle East.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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