Could PlusToken Scam Be Responsible for Broken Crypto Market Structure?

Tony "The Bull" Severino

1 year ago

3 mins read

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Ever since Bitcoin’s bottom at $3,100, the crypto market has been convinced that the first-ever crypto asset was building a foundation for its next bull run.

But a powerful parabolic rally this year was unable to set a new all-time high, putting a new bull run in jeopardy. Could the impact of a massive Ponzi scheme earlier this year have affected Bitcoin’s market cycle, changing the trajectory of the asset’s price for the short-term?

PlusToken Ponzi Scheme May Be Responsible For Broken Crypto Market Cycle

Markets are cyclical, and history often repeats itself. Oftentimes technical analysis in crypto or any market for that matter focuses on the past in order to attempt to predict future movements. The practice is usually fruitful, but occasionally an event comes along that alters the cycle in some way, throwing off even the best analysis.

According to one crypto analyst, a massive Ponzi scheme related to PlusToken out of China may have caused an “abnormal effect” on the crypto market, causing it to rally much more strongly than it should have before a full recovery was underway, and additional sell pressure that’s causing miners to capitulate ahead of schedule.

I’ve been seeing a lot of Twitter FUD opining on miner capitulation in the last few days.

This got me thinking… could the selling by the PlusToken scammers have had an abnormal effect on this market cycle? pic.twitter.com/VZGjyQAxaF

— 🏴∴boxes full of pepe∴🏴 (@ErgoBTC) November 21, 2019

The resulting massive rally caused FOMO that has since burned out, and a post-rally selloff is turning into yet another extended downtrend.

PlusToken was a Ponzi scheme that resulted in scammers making off with an estimated over 200,000 BTC. Investors sent the scammers Bitcoin in exchange for the scam token, and the buying up of a large percentage of the scarce Bitcoin supply may have helped cause the asset’s price to go parabolic in early 2019.

The scammers have since mixed a total of 129,000 BTC according to the analyst, sold off from early August through today, accounting for an average of 1,300 BTC sold per day.

Scammer Selloff Could Be Causing Bitcoin Miners To Capitulate Early

Data reviewed by the analyst suggests that the 200,000 BTC estimate was somewhat accurate, with 187,000 BTC in total being scammed in the PlusToken scheme. With 129,000 BTC sold, it leaves a total of 58,000 BTC unmixed that are still being sold off at a rate of roughly 1,300 BTC per day.

This suggests that the sell-off duration could last between another month or two. It also opens up the door to additional theories on how this may influence current market behavior.

NEVER gone into a halvening in BEARISH price action, miners already capitulating adding sell volume. Historically we front run with a BULLISH setup, miner capitulating only after halvening when revenues are slashed. This is a unique setup. Quite bearish leading up to the event. pic.twitter.com/20748Zv8aQ

— Willy Woo (@woonomic) November 18, 2019

Bitcoin miners are said to be a capitulating, but as crypto expert Willy Woo points out, this is the first time in the asset’s history where miner capitulation is occurring before Bitcoin’s halving. In the past, according to Woo, each halving has been front-run by bullish price action, with miner capitulation only happening as the block reward is cut in half.

Clearly, something has caused this recurring cycle to deviate from historical norms, and the 200,000 BTC out of the total 21 million BTC supply to ever exist suddenly being bought, then dumped into the market, could be at fault.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.