(LTC) Bots, Market Manipulation, and Forced Liquidations, Oh My!
Alright folks, been AWOL for a bit but today's utter chaos called for a serious look at what appears to be blatant market manipulation.
So naturally, being that this is an LTC chart one would assume we'd be taking a hard look at litecoin.....well not really, sorry folks.
I actually chose litecoin because every since the litepay debacle the project has taken an utter beating...while your ltc wallet probably took a heavy hit...it gained something beautiful from all the chaos: increased market independence.
That is key, because as we all know BTC is practically a crypto index these days, LTC always had more autonomy due to more fiat trade pairs than other alts, but now especially it is moving more freely from BTC's clutches.
This is important, because while a knee jerk sell off of BTC like we saw this morning will always see alts follow; the ETH and LTC markets dont often appear to take direct ratio downturns with BTC.
But not this time. Oh no, this time fiat heavy trade pairs took nearly an identical hit...and that my friend's smells damned fishy.
(Just a sidenote: my formal background is actually in engineering and algorithmic cycles are something I studied pretty extensively, so I'm not just pulling this out of thin air, the cycles were clear and apparent from the get go)
Anywho, all the mumbo jumbo no one cares about aside lets jump in.
The pattern:
As someone whose stared at one too many cycle output charts on MATLAB, and written a number of godawful C++ scripts this just screams "lazy coder" at an exchange attempting to disguise market manipulation through bots by just simply adding simple step and rest functions to the code.
Naturaully this is all speculative as I'm not behind the wheel at Bitfinex, but I'm sorry these patterns just seem too impeccable in their execution rate and uniformity.
Now, regarding today's plummet....what was that about? Realistically its anyone's guess until an insider comes forward. In my opinion though I would assume we either saw some mass liquidation by a few whales trying to FUD the market into a landslide so they could buy up bags, or possibly some major forced margin liquidations on the exchange side. Trading with leverage is at an all time high, what do you think makes more money, fees, or liquidated margin positions? Yeah, excatly lol
In all reality I think the most likely scenario is a mix of the two.
Anywho, heres a little bit about what to watch for with litecoin in the post freefall chaos.
This analysis is meant for purely educational purposes, and whether you choose to trade on it or not is entirely on you!
Good luck and happy trading fellow cryptoheads!
Austin Doyle
CTO
So naturally, being that this is an LTC chart one would assume we'd be taking a hard look at litecoin.....well not really, sorry folks.
I actually chose litecoin because every since the litepay debacle the project has taken an utter beating...while your ltc wallet probably took a heavy hit...it gained something beautiful from all the chaos: increased market independence.
That is key, because as we all know BTC is practically a crypto index these days, LTC always had more autonomy due to more fiat trade pairs than other alts, but now especially it is moving more freely from BTC's clutches.
This is important, because while a knee jerk sell off of BTC like we saw this morning will always see alts follow; the ETH and LTC markets dont often appear to take direct ratio downturns with BTC.
But not this time. Oh no, this time fiat heavy trade pairs took nearly an identical hit...and that my friend's smells damned fishy.
(Just a sidenote: my formal background is actually in engineering and algorithmic cycles are something I studied pretty extensively, so I'm not just pulling this out of thin air, the cycles were clear and apparent from the get go)
Anywho, all the mumbo jumbo no one cares about aside lets jump in.
The pattern:
- Cycle decrease is taken from impulse move to impulse move
- Primary cycle appears to be 58 bars
- Cycle break was 79 bars, nothing too telling here regarding cyclic length but it is worth noting that the offset rate of decrease from impulse high to low is maintained.
- Every post pump down trend angle is increasing by exactly 2 degrees every cycle
As someone whose stared at one too many cycle output charts on MATLAB, and written a number of godawful C++ scripts this just screams "lazy coder" at an exchange attempting to disguise market manipulation through bots by just simply adding simple step and rest functions to the code.
Naturaully this is all speculative as I'm not behind the wheel at Bitfinex, but I'm sorry these patterns just seem too impeccable in their execution rate and uniformity.
Now, regarding today's plummet....what was that about? Realistically its anyone's guess until an insider comes forward. In my opinion though I would assume we either saw some mass liquidation by a few whales trying to FUD the market into a landslide so they could buy up bags, or possibly some major forced margin liquidations on the exchange side. Trading with leverage is at an all time high, what do you think makes more money, fees, or liquidated margin positions? Yeah, excatly lol
In all reality I think the most likely scenario is a mix of the two.
Anywho, heres a little bit about what to watch for with litecoin in the post freefall chaos.
- Although it did spend a short period below it, LTC was range bound (~$115-$120) for quite some time prior to today's plummet.
- The crash dead stopped at 162% extension from the final impulse wave up
- We did tag the major trend 1yr+ support but as I write this it looks as though we may close this bar above it
- We'll soon be approaching 58 bars since the smackdown. It's far from guaranteed but I do suspect well see some impulsive movement in the 58-79 bar range
- If we get this movement, and it occurs on a bar following a close over the long term support TARGET 1 will be the 162% extension, TARGET 2 will be ~$115 (the prior lower bound of the ranged movement)
- If however we hit that impulse move below the long term trend I'd say it might be time to gear up as the bears try to pull our beloved LTC down to $108 range.
This analysis is meant for purely educational purposes, and whether you choose to trade on it or not is entirely on you!
Good luck and happy trading fellow cryptoheads!
Austin Doyle
CTO
Comment:
It would appear my reference line for peak prior to the plummet was shifted while posting, note that the reference values for the 58 and 79 bar range are in the correct spot NOT THE VERTICAL REFERENCE LINE.