Its centralized exchanges

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:

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:

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

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  1. Whales buy OTC or via exclusive mining contracts (which don’t get priced in) and coordinate selling it on open markets to trigger stops and wipe out leveraged trades then scoop up the bags of everyone who just got liquidated at a deep discount. The price will quickly move back up but not before causing a lot of damage to regular traders.

    every. single. time.

    Essentially, centralized exchange practices make this possible and they have no incentive to change it.

    Anticipating run-ups will ALWAYS create a wall of stops and leveraged trades. The ones that pay for the expensive trading accounts CAN SEE THEM and will always target them to knock people out of the trade. Basically, they’ll do this as many times as they think they can get away with it before “allowing” the run up to actually happen.

    The more broadcasted the anticipated run-up, the more likely this antagonistic trading will happen.

  2. I don’t belong here. Came from another sub where this post was shared. So please forgive what is probably a stupid question. How can they fake Crypto? Is it because users hold an account with an exchange and don’t have an actual crypto wallet?

  3. Those who were waiting to sell the last week of december, because of taxes…they are the only one fucked up. Now they will not, and personally i believe it is a great move for BTC, because those will not sell now, and 2022 will be very bullish.

  4. This reads like a bad conspiracy theory.

    Sometimes macro shit happens! March 2020. 20 months later, after trillions of USD have been printed, this economy feels like it is on the precipe of a disaster.

    Lots of new dollars mean more and more risks have to be taken for investments to bear fruit against inflation. Those dollars flow to banks, and ultimately into real estate, equities, and Bitcoin.

    In an economy inflated too much, the bubble has to pop sometime.

    As of Wednesday it was looking like Evergrande is about to declare bankruptcy and default on $200B of foreign bonds. Those bonds value going from $200B to $0 is going to make a lot of other balance sheets look smaller, forcing them to liquidate positions to meet margin calls.

    Likewise leveraged buyers and short sellers get liquidated all the time.

    There’s a rational less complicated explanation than yours. Also, you can’t create “fictitious” BTC. My god, that’s the very essence of Bitcoin.

    Binance and Tether are almost certainly doing shady shit, but the magical thing about Bitcoin is that you MUST have the BTC in your possession to short it on any legitimate exchange. I don’t know about Binance, but they seem shady and like they might be abusing their users, but that can only indirectly affect the price of Bitcoin if they’re not actually interacting with the block chain. If arbitrage is happening, and it is, then that would prevent this very disparity from existing and being profitable for Binance.

    Watch out if Binance stops allowing withdrawals.

  5. I believe it. The province of Ontario in Canada is forcing exchanges to comply with increased regulation. Instead of complying, Binance are pulling out. I bet they don’t want the increased scrutiny because they don’t want to be found out.

  6. what OP fails to mention is that centralized exchanges were also responsible for pumping price to all time highs from the 2020 crash by taking advantage of Fed stimulus that pumped their fiat portfolios. What the exchanges giveth they also taketh away.

What do you think?

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