Bitcoin begins June with a bang. It crossed the massive resistance zones from $9,600 to $10,000. Several analysts claim that it could be the beginning of Bitcoin’s next bull run.
‘Coinbase‘ is one of the largest Bitcoin exchanges having a vast user base. It shut down temporarily after Bitcoin’s rally. Users poured out their anger and frustration over this incident across social media. Many suspect a severe foul play by Coinbase.
Coinbase shutting down within seconds after Bitcoin’s rise: Not a coincidence?
One of the major highlights of the day was the message Coinbase sent out to its customers. The message read, “Bitcoin (BTC) is up by 6.25% to $10,000.00 in the last 24 hours.” And its servers immediately went down.
The reason a lot of people suspect foul play involved is because Coinbase is a well-known exchange. Its servers should be capable enough to handle a surge in traffic. On top of that, Coinbase itself boasts of its superior technological infrastructure.
Bitcoin’s rise was not exactly gradual; it was instantaneous
If we look at the BTCUSD charts, we see a sudden spike in volumes and prices. The daily timeframe shows Bitcoin’s jump. It broke past the crucial resistance levels.
However, the surprising thing is that the jump came within a short duration. The daily chart does not capture that precisely. However, if we look at the short timeframe charts, we can see it was almost instantaneous.
Check BTCUSD Chart on tradingview.
The fifteen-minute chart captures the sudden spike in volume and price. Analysts feel it could be the result of a BTC whale acquiring large amounts. It results in decreasing the supply and therefore drives prices up.
A lot of retail investors fall into this bull trap. They start buying more BTC, thinking it to be a bull run. The whales find it a perfect opportunity to enter a short position and dump their holdings.
So the whales are making two kinds of profits in such a situation:
- The first kind of profit is by selling their Bitcoins at very high prices.
- The second gains are from short positions. As they dump their holdings, BTCUSD falls. The shorts make money when BTCUSD falls.
Therefore, it might be prudent to resist the temptation of buying Bitcoins now. Once the market settles down, an investor could buy BTC at attractive prices.