I was just checking the BTC dominance and it is at ~42%. It hasn’t moved at all. This is strange because we had a standard -20 to -30% correction. Almost all Alts have bleed against BTC so unless there has been some flippening it dosn’t add up
People are selling their Alts for fiat. While BTC is being accumulated with amount on exchanges at ATL; 6.2%
On chain analysis shows that most BTC address are becoming HODLers. With OTC desks now accounting for nearly ~80% of BTC trade
So we have:
1. 6.2% of BTC on exchanges
2. Of that 6.2% most are HODLers
3. 80% of trading is via OTC limiting price impact
4. Alts bleeding against BTC but no movement in dominance
So who is selling BTC?
The answer is no one?
In simplest terms centralized exchanges; most likely Binance, Kucoin and Bitfinex are selling thin air via USDT backed leveraged trading. On Bitfinex alone ETH and BTC shorts are over 2 billion
But you asking yourself why would these shorts effect price so much?. They don’t themselves but in combination with spot leveraged trading and USDT backed printed reserves. They create fictitious BTC balances in their users accounts
By which I mean that Tearher prints USDT to cover gaps in accounts on Binance and co. While Binance then leverages those amounts on trades. Creating fictitious BTC trades. With no real BTC being traded. Based on the open intrest and liquidations with no movement in BTC
I estimate that at least 60% to 70% of all BTC being traded is fictitious
This is in line with a past study that suggested that nearly 95% of trades where fictitious: https://www.cnbc.com/2019/03/22/majority-of-bitcoin-trading-is-a-hoax-new-study-finds.html
However now with the aid of USDT those trades are trapping fiat in exchanges. Not just bogus limit orders to fatten the order books
If I’m even remotely correct it would mean that Binance is most likely insolvent. They are holding a huge amount of worthless USDT: https://coinranking.com/coin/HIVsRcGKkPFtW+tetherusd-usdt
As Binance at $28 billion USDT trading volume is 3x the next exchange
This USDT not their own BUSD is what is covering the fictitious BTC that they are trading. As in actuality Binance only holds $15 billion ( ~292k BTC) of which as discussed isn’t being traded by the users.
They most likely:
1. Started “lending” out users balances and displayed fictitious amounts in accounts
2. Due to supply shock started fractional accounts. Partially backed by USDT. E.g USDT supply increase correlated with BTC outflows from exchanges
3. Now actully are highly insolvent in both actual BTC and fiat. Holding mainly USDT
To clarify when I mean partially backed by USDT I mean that on Binance if your account says 2 BTC. You can only withdraw 1 BTC at most. The other BTC doesn’t exist it’s a fictitious BTC created by USDT backed trades on the platform.
Therefore if an actual parabolic run where to occur. It would be the worst case scenario for these exchanges. As they don’t actully have the fiat or crypto to cover the withdrawals
If BTC when to $100k and people started wanting to exit. They wouldn’t be able to exit in fiat but only USDT which is functionally useless outside the fictitious BTC scam. Of the decided to withdraw BTC from Binance to US backed ones such as Kraken and Coinbase it would be the same.
This is why ~ 80% of BTC trade is now OTC
So it is to the benefit of centralized exchanges to keep the price if BTC artificially low. Done through mass liquidations that reduce pressure on the system.
It is my belief that on May 19th 2021 it was the near collapse of this system that caused both the crash and the outages on exchanges. Totaling $1 trillion in value to be lost in hours