News broke today (May 24) that the US Justice Department has opened a criminal investigation into market manipulation of bitcoin prices. It’s working with the US Commodity Futures Trading Commission (CFTC) to bring bad actors to justice.
Bitcoin—in keeping with its reputation for being volatile and unpredictable—promptly rose 3%.
What exactly is going on? Not even bitcoin’s most dedicated traders seem to know.
On the WhaleClub Telegram chat group, where more than 34,000 traders discuss bitcoin price moves all day, opinion was split over whether to buy now or wait for a collapse. A user named WOMBATMAN was convinced this was the time to go all in, reporting to the group: “I just aold [sic] my kidney just for this moment :)” Meanwhile, a user named JM opined: ”Gonna crash so hard soon.”
Amid the stream of esoteric attempts to interpret price and other charts in the name of technical analysis were memes to keep traders’ spirits high. An administrator of WhaleClub who goes by Rogier thought the rally was a bear trap—a rally that looked like it might collapse but in reality would keep going on—thus exposing bearish traders who went short. He illustrated the point:
Some of the theories bandied about by WhaleClubbers: Sellers were rushing in to trade bitcoin after hearing about the price manipulation; crypto whales were trying to catch short-sellers out; or market manipulators were indeed manipulating the market.
Perhaps a user who goes by Wolex had the most pertinent observation. As prices kept rising, he asked: “What the heck is going on”