*Who bought Bitconnect coin?
Yesterday was an interesting day for Bitconnect. After server maintenance the price did shoot up twice. Fist time it was followed by a selloff, then there was another wave higher. That got me thinking there are two reasons why this could happen.
- It was a coordinated whale pump.
It is certainly a possibility but I highly doubt it. I doubt somebody with 7 figure account will take that risks, transfer funds to a hyip and try to manipulate the price. Plus the last month the selloff was so high nobody will risk buying the coin. It might be, but I doubt it.
- Bitconnect intervened in the market.
Bitconnect intervened in the market. It's certainly possible. From all time high in November to yesterday's low, bitconnect dropped 60.50%. The sell-off was concerning everybody invested with them and certainly they desperately need credibility.
- Yesterday's bitcoin rally spurred optimism
Certainly a possibility too. As long as Bitcoin keep rising, bitconnect has a chance to survive. Although this does not explain 115m volume in a single day. Average daily volume is 15-20m a day, and there is no way retailers have that much firepower. It either has to be big whales, or bitconnect itself.
This reminds me Swiss National Bank intervention
We can't analyse bitconnect price with other cryptocurrencies. It's totally different. It is reacting differently too. Bitconnect price vs bitcoin shows a clear picture deposits/withdrawals on bitconnect lending platform. Until november Bitconnect was outperforming bitcoin, simply because the platform was growing (new investors) plus old investors were reinvesting.
Now it is a different story. Bitconnect has grown so big that daily interest is higher than new investment. That's why we see a decline in the price every day after interest payouts, around 19:15 ET. This explains the smooth decline in the price.
The market reminds me Swiss National Bank intervention. They had enough firepower but failed to succeed. That's a perfect example that nobody can fight the market.
My estimate
The last week, average daily trading was 20 million. From which 60% was sell orders, or 12 million. Daily interest was averaging 1.50%. I took as a consideration 2% simply because loans higher than 10K have an additional 0.25% plus referral bonuses. According to this Bitconnect should have around 600m in loans. Make sense, my estimate for Bitconnect was 500M to 1B.
The only thing that can help bitconnect is bitcoin price going up. Even that has to keep going up in expenantional rata. Bitconnect is too big now, Nobody can prevent selloff this big.
Follows and upvotes are appreciated :)
Disclaimer: The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. This is not a financial advice. It should not be regarded as investment/trading advice.