Cryptopocalypse – Who’s Selling?

– The December rally was primarily US retail led
– The recent sell off looks to be largely an unwind of US retail FOMO buying
– Bitfinex, as a price laggard during the rally, is unlikely to have manipulated pxs higher

In order to try and get an idea of who was driving the recent Bitcoin selloff, we pulled available exchange price data off of and ranked each daily close 1- 9.

The chart below shows the results.  The largest price premium was given a 1 and assigned the color green.  The top price laggard was given a 9 and assigned the color red.  The others fell in between.

US exchanges, Coinbase and Gemini, were the primary price leaders right up into the end of December (can probably omit CEX.IO given its perma-premium and lower liquidity).    Over the last 3 weeks, Coinbase and Gemini have flipped hard and now tend to have some of the lowest prices amongst exchanges.   This is especially pronounced with Coinbase – which is primarily a US retail exchange.   Bitfinex has very much been the opposite of Coinbase – generally trailing the prices of other exchanges during the rally and now leading prices over the past 2.5 weeks.  Bitfinex is a good proxy to the world outside the US given their strong liquidity and because they no longer support trading for US individuals.

This also provides reason to question the Bitfinex/Tether price manipulation narrative (ie. that Bitfinex was printing Tethers to buy BTC and push the price higher).   During the rally, Bifinex was a price laggard, not a price leader.

Chart.  Exchange Price Rankings, Nov-Dec.
Exchange Price Ranking

Given that the bulk of US retail FOMO buyers have largely been cleared out now, I think that puts us in a position to build a floor around the current level and begin the grind higher.  Holders with an average price < 6000 are likely to be increasingly sticky as you move down that price curve – with a better understanding of the ecosystem, more experience with the volatility and are more likely to hold a longer term view –  and I suspect are a lot less inclined to panic sell.

I think it’s also worth noting that the infrastructure issues that were plaguing the network in December (jammed mempool, slow confirmation times, high transaction fees, onboarding bottlenecks at major exchanges) – and that may have had a roll in stalling out the retail rally – have all improved significantly over the past 1.5 months.


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