The crypto market is known for its wild west environment, rife with scams, bad actors, and market manipulators. Last year, the CFTC launched a probe into potential market manipulation across Bitcoin markets, yet the problem persists even today.
In this latest example, a $120 million buy wall was spotted by multiple crypto analysts overnight and into the early morning hours on leverage trading platform BitMEX. But who set the order, and what was the intent behind it?
The Curious Case of the Bewildering BitMEX Bitcoin Buy Wall
Last night, a massive buy order for Bitcoin on BitMEX appeared at $10,150 and then again later at $10,120 and sat there over the course of a few hours, pushing Bitcoin price up incrementally. Buy orders of this magnitude are rare, and when left in a large single order block, are called “buy walls.”
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Buy walls can simply be large orders by large players just waiting to be filled. Wealthy investors use large amounts of capital, and could very well have an order set that’s far more than what is currently being sold on a platform.
Other times and the more likely scenario is that the buy wall was part of an elaborate strategy, or was simple spoofing – the practice of setting large orders in an attempt to encourage buying or selling, depending on if the “spoof” is a buy order or a sell order.
A few hours ago, there was a $120M buy wall on Bitmex.
Obviously someone trying to unload some corn. 📉🌽
Don't get caught with your pants down.
— The Crypto Monk ⛩ (@thecryptomonk) August 28, 2019
Large buy orders like this one give crypto traders false confidence that support or buying interest below exists, and can artificially drive up the price of an asset. The inverse is true for sell walls.
Other theories include the buy wall being used to actually unload Bitcoin. One crypto analyst says that the order could have been set so the person behind the order could actually “unload” their Bitcoin. The analyst says that the buy wall was the only way the price could be sustained while the same person was dumping their Bitcoin at slightly higher prices.
130m bid order sitting at 10120 on Mex. Largest single order I've ever seen.
— Hsaka (@HsakaTrades) August 28, 2019
Open Interest Increasing, Is a Big Move Coming?
The buy wall has also had a spillover effect of renewing interest in crypto traders, as open interest has increased on BitMEX by about 11,000 BTC, or by roughly $112 million.
This next move is going to be something else.
— Mac ❄️🐺 (@MacnBTC) August 28, 2019
Open interest increasing typically precedes a big move, and given how long Bitcoin has been trading sideways, the largest move in some time is expected. One crypto analyst suggests that the “next move is going to be something else.”
BitMEX is a popular margin trading platform where traders go to take advantage of major price movements by trading Bitcoin with up to 100x leverage, multiplying any gains by a factor of ten. Other margin trading platforms include Deribit, and PrimeXBT, both offering a way for crypto traders to capitalize on Bitcoin’s notorious volatility much like BitMEX.