
Watching the Bitcoin fire from a safe distance – what just happened - davidgerard
https://davidgerard.co.uk/blockchain/2018/01/16/tis-just-a-seasonal-dip-watching-the-bitcoin-fire-from-a-safe-distance-what-just-happened/
======
justboxing
> This crash didn’t just happen — it appears to have been provoked by a pile
> of fake sell walls, such as a large spoof order at $12,000 that disappeared
> as soon as the price approached it, and another at $11,000. If this isn’t
> our friend “Spoofy”, it s a close relative.

> (This sort of glaring manipulation is ridiculously illegal in real
> securities trading — but welcome to Bitcoin.)

I really don't understand what these "walls" are, and how they can be spoofed.
Do the same things also apply to traditional trading on Wall St. or is this
unique to crypto currencies?

Anyone?

~~~
bjterry
At any given moment there will be a ton of offers people have made to buy or
sell at a given price out in the market (whether it's Coinbase, NYSE or
whatever). See [0] for an example of how this "order book" is visualized. In
the middle is where the actual transactions are happening.

A fake sell wall is a giant offer to purchase at a price that is pretty far
from the current market price. On that chart it would be visible as a large
vertical uptick. As the price goes down and approaches the huge buy order, the
trader cancels it and the wall disappears.

On a traditional exchange this is technically possible, but it's illegal to
intentionally manipulate the market by placing orders. People often complain
that high-frequency traders put in these orders and cancel them immediately
without having the intention to actually transact.

0:
[https://www.bitstamp.net/market/order_book/](https://www.bitstamp.net/market/order_book/)

~~~
justboxing
Wow. Thanks for the explanation.

------
dreit1
Ah yes again with the "I told you so" posts. Even though basically everyone
that has been in the market before December is still significantly in the
green. But no, THIS is probably the time cryptoassets are dead

------
mcintyre1994
250 million tethers appeared in 2 days? Is there anything close to an audit of
what Tether Limited are actually holding? Why are people fooled by a
cryptocurrency supposedly backed by USD that obviously isn't?

~~~
davidgerard
because NUMBER GO UP

Really, that's the whole reason. As long as the Bitcoin market keeps treating
Tethers like real dollars, the NUMBER KEEPS GOING UP, the media keeps running
articles on this exciting new asset class and new bagholders keep putting
their cash in for existing holders to cash out with.

~~~
mcintyre1994
Presumably the exchanges are all correlated enough that Bitfinex can pump BTC
and whatever else across the market by injecting Tethers?

~~~
davidgerard
arbitrage is difficult because the market is stupidly inefficient, but yes,
the prices do more or less correlate.

e.g., last night when they arrested the fall with 100m more Tethers, the price
shot up $1000 on Bitfinex and about $400 on GDAX a bit later.

------
t0mbstone
"But the emperor isn't wearing anything!?"

~~~
stillbourne
But a commodity currency based on entropy has no value!?

~~~
liberte82
Now we know how third world countries feel.

