- A massive liquidation by a Ponzi Scam, caused by PlusToken, could have caused the collapse of the market.
- Analysts agree that Bitcoin is oversold. There are signs of a change in the bearish trend.
A new fact changes the perspective of what could have caused the Bitcoin price collapse during the last week. It could be the liquidation of a Ponzi scam around PlusToken. This action would have led to an increase in Bitcoin’s sales volume. The over-sale of the king of cryptocurrencies would have brought the whole market into the current situation.
PlusToken Ponzi Scam increases Bitcoin’ sales pressure
The Ponzi scam in question occurred midway through the current year. At that time, users of the PlusToken wallet reported irregularities in its operation. Later, it would be verified that the users’ funds would have been withdrawn without their consent which in turn consolidated the fraud.
Although several team members behind PlusToken have been placed under arrest, others were able to escape with a large amount of Bitcoin. The estimates are around 190 million BTC. The perpetrators would have started moving and trading the stolen funds. Therefore, flooding the market with a surplus of BTC which could last for months.
This fact is connected with the capitulation of miners that was recorded during the last few days. In principle, it was speculated that the miners would have capitulated their positions ahead of Halving 2020. In addition to the worsening of the bear market that prevented them from maintaining operations.
However, as pointed out by members of the cryptocommunity, such as Dovey Wan, the over-sale of BTC would have been the main cause of the recorded capitulations. The miners would have emptied their mining wallets as selling pressure on the BTC increased.
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— Dovey 以德服人 Wan 🗝 🦖 (@DoveyWan) November 27, 2019
The events described, especially the over-sale of Bitcoin, would have caused prices to plummet and started a bearish trend in the market.
Bearish market for months or change of trend?
It is necessary to take into account the tightening of regulatory measures in China towards crypto-exchanges. The Asian giant is preparing to launch its CBDC (Central Bank Digital Coin), the digital Yuan and could be trying to create a more favourable environment for its adoption.
In the short term, the closing of Bitcoin Futures on the Chicago Mercantile Exchange also seems to have influenced the price. Historically, the BTC price has tended to decline as the close of Futures approaches and the gap in the CME is filled. The most recent gap was filled when the price reached $7,300 USD.
In addition, there is a growing expectation of how the market will react when the Halving takes place reducing the rewards to miners. This event is scheduled for the middle of next year, when Bitcoin’s blockchain reaches its 210,000 block.
At the time the article was published the price of Bitcoin was $7,621USD with a recovery of 5.89% in the last 24 hours. As can be seen, the factors that have influenced the cryptocurrency market are multiple. Despite the opinions of analysts, it is necessary to wait and see how prices will develop in the coming days.