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Large crypto exchanges appear to have stopped misreporting their trading volumes in 2019, a new study by Chainalysis says. According to the New York-based blockchain analytics firm, there are still some crypto exchanges including Bitforex that likely report fake trading volumes to simulate greater market activity and liquidity. Chinalysis posted the study on its blog on Nov. 15.

In the study, Chinalysis analyzed the top 10 cryptocurrency exchanges, known as the “Bitwise 10,” which were reportedly considered the only large exchanges that reported their actual volumes. Those exchanges include Binance, Bitfinex, Kraken, Bitstamp, Coinbase, BitFlyer, Gemini, itBit, Bittrex, and Poloniex.

Top 10 genuine volume reporters see 6 BTC in trade volume for every 1 BTC on-chain

The firm used the Bitwise 10 as a representative sample of large exchanges who report accurate trade volumes, and compared their data with volumes of other exchanges in order to discover potential suspicious activity. Specifically, Chinalysis found out that in a period between January 2018 and November 2019, the average ratio between trade volume and on-chain volume received for the Bitwise 10 accounted for 6:1. The data means that the Bitwise 10 see roughly six Bitcoin in trade volume for every one Bitcoin received on-chain.

Chinalysis further analyzed 25 other exchanges with large on-chain volumes out of the Bitwise 10 list. The firm eventually identified 12 more exchanges whose trade volume to on-chain volume ratios significantly differed from the Bitwise 10 in 2018, but have since declined more in line with the exemplary data. The 12 exchanges list included Huobi, OKCoin, UPbit, Bithumb, Bit2c, Bitbank, Bitso, CoinCheck, Coinfloor, CoinOne, Korbit, and Zaif.

12 exchanges including Huobi and Bithumb stopped misreporting volumes in 2019

Based on the data, Chinalysis concluded that it’s likely that those 12 exchanges were faking trade volume in 2018, specifically during the period between July and January 2019. Since 2019, the exchanges’ trade volume ratios have tracked more closely with those of the Bitwise 10, suggesting that they have stopped misreporting volumes.

Ratio of Bitcoin traded per Bitcoin reviewed on-chain. Source: Chainalysis

Some exchanges are allegedly still practicing misreporting

While the majority of exchanges appear to have moved away from faking volumes, there were still some exchanges that saw suspicious activity. According to Chainalysis, reported a trade volume ratio of 40,000:1 in a period from January 2019 to November 2019. That means that Bitforex reported 40,000 bitcoin worth of trade volume for every 1 bitcoin that enters the exchange, compared to just 6 for the Bitwise 10.

Bitforex is ranked the 34th-largest exchange by trade volumes at the time of writing, according to Coin360.

Bitwise’s study in 2019 claimed that 95% of volume on unregulated exchanges was fake

Chinalysis’ new study follows a report by crypto index fund provider Bitwise Asset Management claiming that as much as 95% of volume on unregulated exchanges appears to be fake or non-economic in nature.

On Nov. 12, major crypto data supplier CoinMarketCap launched its new metric to compare exchanges and token pairs based on liquidity as a measure to prevent manipulation by exchanges.

Cointelegraph By Helen Partz , 2019-11-21 21:25:00 ,

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NewsBlock © 2019 - 2020. All rights reserved.


While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock


Nick Chong , 2019-11-10 12:00:38

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