Despite the promises of crypto analysts and institutions like Goldman Sachs, Bitcoin price continues to hover around low 5 figures. What’s going on?
After struggling to hold above the $11,000 point earlier this week, Bitcoin price, at last, succumbed to selling pressure and dropped below $10,000 for the second time in three weeks. Prior to the drop, numerous analysts predicted that $10k would serve as a reliable bounce point as the price represents important psychological support.
Clearly, this was not the case and even after making a strong upside move from $9,500 to $10,450, Bitcoin still struggles to stay above $10,100.
Let’s take a look at what is keeping the king of cryptocurrencies down.
Dovey Wan says Ponzi Scheme is Crashing the Crypto Market
On July 14 Primitive Crypto founding partner Dovey Wan attributed the sharp sector-wide correction to bulk Bitcoin sells from PlusToken, a Chinese Ponzi scheme. The scheme managed to accrue 200,000 Bitcoin and more than 800,000 Ethereum from naive investors in China.
According to Wan, not every member of the PlusToken team has been arrested yet and data from cybersecurity auditing firm Peckshield shows that recently more than 1,000 Bitcoin was transferred to Huobi and Bittrex from PlusToken accounts.
Wan is convinced that the scammers are covertly shifting their funds “into small batches into exchanges, like 50 to 100 Bitcoin per batch.” Wan also claimed that she recently stumbled across a chat where Chinese traders were saying that someone had been dumping 100 BTC non-stop on Binance.
If true, it is entirely possible that large back to back sales of Bitcoin could affect spot rate across exchanges but this sole event is probably not fully responsible for Bitcoin’s malaise.