Jacob Canfield, a crypto market analyst known for accurately predicting bitcoin’s 2020 price rally, has alleged that there was market manipulation in the trading of altcoins this year.
In a video published last week, Mr. Canfield linked the resurgence of otherwise underperforming cryptocurrencies like Ethereum and EOS to PlusToken, a Ponzi scheme that, under the disguise of a high yield investment company, stole over $3 billion from its clients. The steal included 70,000 bitcoin, 790,000 ether, and 26 million EOS tokens.
Mr. Canfield noted that PlusToken scammers first artificially pumped bitcoin from $3,500 to circa $14,000 last year. They then sold about 70-90K BTC in the range of $9,000 and $13,000, which roughly equals about $600 million. The profitable move gave them enough capital to drive the altcoin market upward.
“If [Plustoken scammers] are using their capital to push the Ethereum market, then they can push its prices back to $300, $500, $600 and even $1,000,” said Mr. Canfield. “They can also set up traps for short-sellers and continue to push the short-seller cascade in thin-order markets.”
The statements came at the time when altcoins are severely outperforming their top rival bitcoin. Ethereum and EOS, for instance, surged by up to 130 and 155 percent after bottoming out in December 2019. In the same timeframe, bitcoin surged by up to 63 percent only.
On the whole, the crypto market – excluding bitcoin – attracted up to circa $66 billion between December 2019 until February 2020 top.
Mr. Canfield theorized that PlusToken scammers are using cryptocurrency exchanges and OTC brokers with closed order-books to trade their steal for alternative crypto tokens. The analyst further admitted that he has stopped entering short leveraged positions over his fears of fat price dumps.
Crypto Trend Will Continue
Despite fears of a massive dump, Mr. Canfield believed the crypto market will keep rising. The analyst recommended traders to identify near-term dips to buy Ethereum, EOS or other altcoins but exit their positions on the first signs of deep pullbacks.
He further advised traders to watch the crypto wallets that belong to the scammers associated with PlusToken, noting that any kind of small or big withdrawal would alert them of a potential bearish correction.
“What I’m watching is for those PlusToken coins to move. Potentially, that could be a tapping indicator of the altcoin market,” Mr. Canfield explained.