RogueDave

BTCUSD - BitFinex Driven Breakout - Analysis Article

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
If you were watching the BTC break out, and the multiple markets, you undoubtedly watched BitFinex lead the breakout. (I watch 4 markets, BitStamp , Coinbase/GDAX, BitFinex, and Kraken. I watched BitFinex lead this breakout, every other exchange was lagging.) Read this article at Medium.com about how one trader has tracked a Spoofing Trader or group of traders operate at BitFinex. BTC is being manipulated.

https://medium.com/@bitfinexed/meet-spoo...

Meet ‘Spoofy’. How a Single entity dominates the price of Bitcoin .

"This story is about a trader, or a group of traders, or possibly even Bitfinex themselves manipulates the price of Bitcoin . ..."

Comments

Hi Dave,

I found you while trying to find intelligent commentary on the Goldman Sachs Elliott Wave analysis from last month. The general reporting I've seen appeared to be ignorant of what "waves" the analyst (Sheba Jafari was talking about (I don't know much at all about Elliott Wave Theory either, but enough to know what I don't know).

In your comments on TradingView I see that you've seen the GS charts released in early July, but did you know that more charts came out from an analysis in late July?

See here: http://www.zerohedge.com/news/2017-07-20/bitcoin-surges-above-2500-following-goldmans-bullish-note-civil-war-ends

What do you make of them? I don't know enough to tell how much you and she diverge.. And importantly, do you think the garbled way in which her predictions were reported had any impact on the price moves we've seen (i.e., I think her early July call of $3,900 was intended as a late-Fall target, not an immediate target as was reported)?

Actually while writing this I found that a new word and charts from Jafari has been released:

http://www.businessinsider.com/bitcoin-price-technical-analysis-goldman-sachs-top-2017-8

I hope you don't abandon this work because of Spoofy... the hackernoon article makes a convincing case that spoofing is happening, but isn't there a possibility that it has been done by several independent "spoofies"? The author says the disappearance of shorts in a single tick makes him think the spoofer is a single entity, but what if Bitfinex just cancelled the shorts of all spoofing accounts at the same time? Doesn't margin trading allow individual actors to spoof with out-sized positions so large that they seem like they could only come from a large fund or group?

In short, if spoofing is a tool being used by several entities that are not always acting in common purpose (except for an obvious universal interest like gaming the distribution of BitcoinCash), shouldn't the psychology of the crowd still apply?
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RogueDave WillRoper
@WillRoper, Will, thanks for writing. Much of what I see here in TradingView, that claims to pass as Elliot Wave analysis is junk and ignores the rules and guidelines that enable EW to make somewhat accurate predictions and forecasts. I had seen the July 20 ZH article and a subsequent one they posted with an update to the GS analysis. The BI article is very new, and I had not seen that one. Thank you for linking to it. I am not impressed with the public releases of what GS passes along as EW analysis. It is far to broad, basic, and generalized.

Fundamental to EW counts are the fractal structures and embedded waves that cannot be sussed out until the full moves have played out. A very skilled EW analyst may correctly guess those lower degree waves thus enabling better forecasts of larger degree waves, but they are all guesses until after the fact. The GS analysis I have seen entirely or mostly ignore the lower degree waves.

Here's some background on Ralph Elliott's Wave Principle. http://www.elliottwave.com/Free-Reports/Introduction-to-the-Wave-Principle

Here's the introductory summary for his book: "The Elliott Wave Principle is a form of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. Ralph Nelson Elliott, a professional accountant, discovered the underlying social principles and developed the analytical tools. He proposed that market prices unfold in specific patterns, which practitioners today call Elliott waves, or simply waves. Elliott published his theory of market behavior in this book "The Wave Principle." Elliott stated that "because man is subject to rhythmical procedure, calculations having to do with his activities can be projected far into the future with a justification and certainty heretofore unattainable." https://books.google.com/books/about/The_Wave_Principle.html?id=2bGHMAEACAAJ

So investor and crowd psychology is very important. It is said that Joe Kennedy and other very large moneyed interests manipulated the stock market into the crash of 1929. But once underway, investor psychology took over. What is different here in BTC and cryptos in general, is the decentralized exchange & market structure with limited ability to arbitrage price differentials between exchanges. Further any single exchange is not large enough to reflect on a centralized basis collective trader sentiment, but that acts to enable a manipulator to disproportionately have the ability to sway overall trader sentiment. And a large enough influencer, or group of influencers, could individually or in concert sway the broader sentiment & psychology.

To repeat myself (I think), since psychology drives prices in naturally occurring and transacting markets, the manipulation of psychology via prices sets the cart before the horse. The horse is psychology and sentiment. The cart is price levels and information.

Since 2000, advances in the understanding of Behavioral Finance have sought to take advantage and even exploit this understanding. More recently, algorithmic trading, order entry and cancellation, and the use of spoofing and other techniques have turned EW on it's head. Big money doesn't care about natural market ebbs & flows, it simply wants more. The same has become true in equity markets, debt markets, commodity markets, derivative markets for the former, and now too cryptos, and most especially in BTC.

In some ways trying to guess Spoofy's next move is like trying to guess the next move by the Wall Street insiders. I have no doubt that GS, JP Morgan Chase, BAML, Citi, and the rest of the Wall St insiders already know the Fed's next move before it is publicly announced. Moreover, their collective near perfect trading records, month after month, quarter after quarter of not having losing days, or very few, much less weeks or months, or heaven forbid an unprofitable trading quarter, strongly suggest they are rigging many markets, but they are allowed to, they OWN those fvcking markets, and little guys are only permitted to pick up nickles from the train tracks in front of the locomotive(s).

So guessing Spoofy's next move? No thanks. Only Spoofy knows for sure.
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Any alternate count? Could we be in the 5th wave?
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RogueDave mmitkevich
@mmitkevich, Yes, it does appear that BTC is in Wave 5.

No further wave counts on BTC will be forthcoming. Manipulated moves cannot be counted.

Elliott Wave counts require a mostly free market, where the psychology of the crowd has a demonstrable impact on prices. If someone, or a group, or an exchange, is manipulating prices to drive psychology, rather than psychology driving the prices, Elliott Wave breaks down and ceases to operate.

See my post here (click the image):
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@RogueDave What do you think this means for the the price of BTC from here?
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RogueDave view_trade
@view_trade, If Spoofy wants it to go up, it'll rise. If Spoofy wants it to go down, it'll drop. Plain & simple.
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view_trade RogueDave
@RogueDave, 'Spoofy' has been a player in these crypto markets for a while now according to the author; does this information change your existing or future analyses of these markets?
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RogueDave view_trade
@view_trade, No further wave counts on BTC will be forthcoming. Manipulated moves cannot be counted.

Elliott Wave counts require a mostly free market, where the psychology of the crowd has a demonstrable impact on prices. If someone, or a group, or an exchange, is manipulating prices to drive psychology, rather than psychology driving the prices, Elliott Wave breaks down and ceases to operate.



See my post here (click the image):
Reply
view_trade RogueDave
@RogueDave, Thanks Dave! I'll still be keeping an eye on your counts for ETH. Looks like it's approaching your general target area for the next move!
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