Trader Screams Foul Play as Price Drops to $30,000 in Bitcoin Ends in Largest Ever Daily Recovery

An increase of more than 20% accompanies the 12-hour bounce of Bitcoin by $30,000, but questions about the events are increasing.

Bitcoin (BTC) recorded its most successful recovery in history on January 12 after testing the $30,000 support level, but market participants are already suspicious.

Cointelegraph Markets and TradingView data followed Bitcoin as it quickly bounced back to the $30,250 lows at the end of Monday to seal a 20% gain in just over 12 hours.

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Guggenheim sales tips under scrutiny

The return of Bitcoin, which occurs even faster than its previous weekend drop, marks Bitcoin’s best daily performance, both in terms of US dollars and percentage. The numbers will be confirmed once the daily candle is closed, with levels at the close of this edition approaching a local high of $36,600.

However, as soon as the recovery began, concerns arose about the authenticity of recent market movements.

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The popular market analyst and Cointelegraph contributor filbfilb argued that the strength of the rally contradicted what amounted to market manipulation, thanks specifically to the disruptions to the exchange and the unofficial advice from the Guggenheim asset manager to sell at lower price levels.

„Unbelievable what is possible when you can bid in the market,“ he said in a series of tweets.
BTC/USD 12-hour candlestick chart (Bitstamp) with recovery data. Source: filbfilb/ TradingView

As Cointelegraph reported, Guggenheim CIO Scott Minerd advised investors that it was „time to take some money off the table. The company is waiting for permission from the US authorities to buy Bitcoin through the Grayscale Bitcoin Trust (GBTC), and in the meantime Minerd’s words quickly earned him criticism for deliberately lowering the price.

Exchanges Get Attention

For the big exchanges Coinbase and Kraken, on the other hand, the advertising headache continued. As Bitcoin’s fall accelerated from $38,000 to the lows, both trading platforms recorded characteristic interruptions, causing traders to lose control of their orders. The domino effect, as statistician Willy Woo later warned, affected the entire market and even made the price drop worse.

„The sale of the spot market began at around $38,000, then Coinbase partially failed to register purchases, causing its price to fall $350 more than the others; this brought down the price of the index that futures exchanges use to calculate leverage financing, causing downward havoc in the speculative markets,“ he explained on Monday.

„Unlike the previous falls of the last two years, in which over-leveraged markets led to liquidation of traders, this one started in the spot markets, then expanded greatly by a single exchange that partially failed, but was not interrupted for the sake of the ecosystem.

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Woo also asked why the futures exchanges did not remove Coinbase from their listings to stabilize the consequences.

Customers seemed unconcerned. As software developer and commentator Vijay Boyapati noted, Coinbase’s volumes were over 101,200 BTC ($3.6 billion) in the 24 hours to early Tuesday, something he estimates led to gains of up to $175 million.

„As much as I dislike Coinbase, its IPO is going to be a major catalyst for the entire market when it happens,“ he said in accompanying comments.

„A lot of capital is going to flow from the stock market to the #Bitcoin market this way.