Barely a day ago, news spread that Goldman Sachs had decided to drop its plans to open a cryptocurrency trading desk, a report that happened to coincide with a sharp downward turn that the market has since taken. Apparently, there was a lot more going on beneath the surface.
Market analysts recently saw someone take a 10,000 BTC short position even though overall market sentiment had been positive. Analysts were concerned by the move to take a $74,000,000 short position so quickly and the safest speculation was that the person certainly knew something that the analysts and the rest of the market did not. Things even got weirder when just a few days later after the said individual started shorting, some bearish news emerged.
Fingers are already being pointed with the most speculations pointing out that it could have been someone from Goldman Sachs who took the 10,000 BTC short position after which they waited two days and announced that the investment institution was pulling out of its crypto bid.
Unfortunately, these are still mere speculations and in retrospective, they probably will not amount to much. However, thanks to the existence of new Artificial Intelligence (AI) technology that is used to keep a keen eye on the crypto market, industry stakeholders have been able to definitively prove that there was indeed some form of deliberate market manipulation. The perpetrators are yet to be identified though.
When the drop occurred, it ignited a frantic search for news that explained the unusual -10 percent move across the board – the decline in volume was witnessed in bitcoin, Litecoin, Ether and may other cryptocurrencies.
Apparently, Goldman Sachs’ announcement that it was pausing development on its rumored crypto trading desk just added fuel to the fire. Most of the comments around the news gravitated towards suspicion of insider trading and the possibility that certain institutional players would like to get into the crypto space at lower levels hence the manipulation.
To get a deeper insight into what was actually going on, data scientists from AI-based crypto signals platform RoninAI conducted their own investigation to find out more about the unusual activities that surrounded the drop. Many of the available indicators were pointing to the same unusual behavior right before the drop with one of the most prominent being the social sentiment that sporadically increased just before the actual drop occurred.
From the findings of the study, the data scientists strongly believe that the drop was a result of either insider trading or market manipulation. However, they were reluctant to provide any definitive answers. Even so, this might turn out to be good news for the Bulls since whoever shorted 10,000 BTC will definitely be back at some point and when they do they are bound to push the price up significantly. Still, it’s the world of crypto and thus nothing is cast in stone so it helps to be cautious especially because there is no way predicting how this particular event will affect the market in both the short and long term.