Currency Analysis #9 – How To Identify Bitcoin Market Manipulation & Insider Trading

This is Tai Zen – currency analyst for prisonorfreedom.com. It’s a blog where we talk about the tools, the techniques, the strategies and the technologies that are available to help people find freedom in their life and especially in health, wealth and relationships.

In this series of currency analysis videos, specifically in this 9th episode, I’ll talk about how to identify Bitcoin market manipulation and the insider trading that’s going on right now. Today I want to discuss “What is market manipulation?”, I want to also define “What is insider trading” and “How to identify Bitcoin manipulation using technical analysis” and “What you should do when Bitcoin is being manipulated”, so we got a lot to cover.

So let’s go ahead to the charts here. I like to use tradingview.com for my currency analysis, simply because the tools are very simple and very intuitive and it’s easier to use and everyone has access to it. Market manipulation is when somebody, someone or a group of people artificially do something to push the price down or to push the price up. So let’s take a couple examples here of what a real market manipulation is and what is not a real market manipulation or at least what I do not constitute as real market manipulation.

So now let’s just say that the price of Bitcoin falls because China decides to ban Bitcoin or the US decides to ban Bitcoin or Russia decides to ban Bitcoin and the price of Bitcoin falls, now when something like that happens, I believe that to be a natural market occurrence meaning that the government’s always interfering with business, they’re always interfering with people, always trying to take away people’s rights and freedom.

So when they do that and the price falls, that is normal, I don’t see that as market manipulation. I don’t see that as a big deal, that happens all the time in the market, in the stock market – Forex. So to me, that’s just normal everyday procedures in the market. I would not say that Russia or China banning Bitcoin would constitute as market manipulation.

That’s just normal market activity, what constitutes market manipulation to me is when someone like the CEO of Mt. Gox goes out there and they purposely halt or freeze the withdrawal of funds whether it’s fiat or a Bitcoin from the exchange and they do that on purpose.

If they do that because of a technical glitch and they need to fix it, to me that’s not market manipulation. However, when they do it on purpose so that to cause fear and panic and a create FUD which stands for “fear, uncertainty and doubts” in the market, when they create FUD in the markets to purposely drive down the price of Bitcoin and likewise to run up the price of Bitcoin then that would constitute a market manipulation to me.

I wanted to define market manipulation, the difference between a natural manipulation or natural falling price and an artificial so that we are both on the same page and understanding here, the other thing that I wanted to define as “insider trading” is insider trading in the US where I live is considered illegal. I’m not certain if other countries are illegal or not. Most of the first world countries, insider trading is considered illegal.

So insider trading is when you have advance knowledge that the market is going to fall for some reason. So for example, let’s just take the US Stock market, for example, let’s just say that a drug company like Pfizer, they have been notified by the Food and Drug Administration (FDA) that the drug that they are creating is not going to be legal and they do not approve it for distribution among the public.

Let’s just say Pfizer knew that drug ahead of time and I had a friend who is a VP or somebody that’s at the top level executives at Pfizer and they told me to go out there and sell or short Pfizer stock because this drug is not going to be approved by the FDA then that would be insider trading.

Because someone on the inside of the company has informed me and it’s illegal for someone to do that inside the company. That is a conflict of interest, a public company has to publicly release the information that they have about any business that they do or any notifications that they get and they have to release it to the public all at one time so that everyone has access to it.

So when someone inside the company gives me inside information in advance before they release it to the public, that constitutes insider trading and if I go and I take advantage of the inside information before the mainstream public gets a hold of it and I profit from that, that can constitute insider trading and that is the illegal.

That’s how it works in a regulated market, market manipulation, insider trading works in the manipulated market. In a Bitcoin and cryptocurrency market, there is no such thing as regulation. So because of that, market manipulation and insider trading can go on without any problems. When I say without any problems that means that there’s no SEC and there’s no government regulatory body that’s going to come and regulate and enforce the illegal activities.

How do we know that there are insider trading and market manipulation going on in the Bitcoin market right now? I’m not one of those people that like conspiracy theories, I like to base my investment decisions on facts and things I can verify. What I like to look at is this, if we come over here to take a look at the Mt. Gox feed of price data on BitcoinWisdom because it has the order book here and the price ladder here and the time and sales down here.

I don’t pay attention to any of this right here because to me that can be easily manipulated, these are nothing but want ads and for sale ads, the for sale ads are up here, people wanted to sell their Bitcoin and the want ads are down here, the people that want to buy Bitcoin. This is the only thing that matters to me – the receipts, the technical term for it is the time and sales because it prints the time and the sales that occurred.

Someone just sold 14 Bitcoins at 156, we just bought 6 Bitcoins at 154. This to me is the facts. This is just a bunch of opinions and pending orders that don’t mean anything to me. Anybody can throw out an order saying that they want to buy 10,000 Bitcoins or sell 10,000 Bitcoins, but until it shows up on here, it does not mean anything to me. These are just wishful thinking, this is hard evidence.

Now that the facts are printed over here on this chart in the form of the candlestick. And so this is a visual and graphical representation of the time and sales here. So I like to base my investment decision based on facts. So here are the facts down here and here are the facts up here and these are just opinions over here.

So let’s switch back to the trading view charts because I can show you guys this a lot easier. You’ll notice how the market was going sideways for a long period of time before dropping from the 900s all the way down to the low 100s. Now, where are the signs and the evidence of market manipulation here? Now, you’ll notice that in an orderly market meaning that when there’s no manipulation going on…

Let’s switch to the EURUSD, you’ll notice how the price moves up and down, up and down, up and down. You don’t ever see a place where it’s just flat across, switch back to the Mt. Gox Bitcoin price charts and you will notice that up here the market goes sideways for a long period of time, there’s hardly any wicks or candles here that’s mean… I’ll zoom in so you can see it. You can see here, there’s hardly any wick or candle right there.

Then if you come down to here, you can clearly see that there are no wicks and candles right there and then if you’ll come down to here, toucan clearly see that there are no wicks and candles here either. This is not a natural price chart. There is some type of artificial manipulation going on right here and right here, also right there. There’s some kind of nonsense going on here with Mark Karpelès – the CEO of Mt. Gox and his crew over there at Mt. Gox. So that’s why I say that this is market manipulation.

And I said there’s insider trading here because someone is trying to accumulate a large position with Bitcoin and what I suspect is that they are hedge funds and big investment firms, Wall Street investment firms that are trying to accumulate a lot of Bitcoins for their hedge fund or for some type of fund that they’re coming out with and what they need to do is they need to come up with large quantities and buy up large quantities of Bitcoin and they have lots of money on Wall Street.

Keep that in mind that they can print money without ever having to work for it. The 1% that controls all the money on Wall Street, they never have to work a day in their life for the money that they have. Whereas you and I have to bust our butt and bust our tail to make the money that we have in our pockets and in your bank accounts. So it’s very easy for them to easily print out more money and then take that printed money, that counterfeit money, fiat money and go and exchange it for some Bitcoins.

So it’s not that hard for them to buy all the Bitcoins up here and sell it to push the price all the way down to here and then start accumulating it down here. They may spend I don’t know a few millions here. Let’s just say for example that they spent 5-10 million here, they will buy up way more than that.

So they spend a million here, they will buy out 10, 20, 30 million dollars in Bitcoins down here. So I’m just throwing out random numbers. Those numbers are not real or anything. I’m just using it for explanatory purposes. Understand that whatever amount they spend up here, it’s just the cost of doing business, to drive the price down to here. That’s one way to push the price down so they can buy Bitcoins at a cheaper rate for their hedge funds or for their very large, long position.

Now the other way that they can artificially drive the price of Bitcoin down and we know this for a fact that the price of Bitcoin is artificially being driven down because if you look at the bit stamp prices at 587 up here and the BTC-E price is at 568. The rest of the market is not putting up with this and they refused to sell their Bitcoins on the other exchanges.

So now how is it possible that Mt. Gox is able to artificially push the price of Bitcoin down to the low 100s while the other reputable exchanges are keeping it at close to 600. Now the way they would do this in my opinion and I have to make this disclaimer here that this is just my opinion and I’m basing my opinion on the data that I see in front of me.

The Mt. Gox data that I see in front of me is manipulated. Someone who needs to buy a lot of Bitcoin can easily buy out Mark Karpeles and Mt. Gox. Mt. Gox is not a very big company is not a very big exchange. They can be easily bought out. A chump like Mark Karpeles and just so that you guys know who I’m talking about, right?

This is the guy right here. Let’s just type in Mark Karpeles Bitcoins. Let’s look in the images here. And this is the guy right here. This is the guy who…the look on this guy. This guy, this chump right here is the guy that’s the CEO of Mt. Gox. All right, so the big boys on Wall Street who are much more savvy, much more money, much more invested in the financial markets can easily buy this guy out. This guy is just a peon in the financial world. Okay, and I want you to see this right here.

Here’s a picture of a customer wanting to know where is Bitcoins are at and confronting Mark Karpeles right here. He’s got his Starbucks coffee or whatever it is right here. And this guy is just a total chump, screwing it up for everybody in the Bitcoin world, he screwing up everyone’s investment. He’s temporarily hurting the Bitcoin market at the price, right?

So it’s very easy to buy out this chump right here. All the big boys in Wall Street have to do is come over here and offer him some money and tell him to prevent people from withdrawing their funds whether it’s fiat or whether it’s Bitcoin.

So what it does is it forces the price to go down and we know that this is true and we know this is happening because here it is right in front of our face. We know that it’s truly not the value of Bitcoin that’s going down. There’s nothing fundamentally wrong with Bitcoin, right?

It’s as strong as ever and that’s why the price is still at 585 and 570 on bit stamp and on the BTC-E, on a real exchange where they don’t have chump CEOs like Mark Karpeles working there. So what they’re doing is somebody is paying off Mark Karpeles to freeze withdrawal of Bitcoins causing fear and panic and the price of Bitcoin fall down and whoever is paying him off is buying it down here in the low 100s.

Now keep in mind that if we switch this to a 15-minute chart, look at this area right here. This area right here is going to be magnified and look at that. Where in the world do you see a flat line like that for a market pricing and then drop like that? This is what they’re doing. They’re accumulating some Bitcoins here, and then after that, they let the price fall some more, accumulate some more, let the price fall and accumulate.

This is a classic accumulation for a big hedge fund or somebody with lots of money and they want lots of Bitcoin in their wallet. So that’s what they’re doing right here. So that’s why I say that this is market manipulation by the chump Mark Karpeles and company at Mt. Gox and by the whoever’s got a lot of money that pay them off.

Now Mark Karpeles is probably laughing his way to the bank. You see the smug look on his face. Right here that’s probably what he’s thinking right now. If you think he’s panicking or he’s worried about it. I don’t believe that for one minute because anybody that had an ounce of moral or integrity or honesty in them, they would at least let the public know what’s going on if there was truly a technical issue.

The Bitcoin community is very forgiving, they are very understanding that the Bitcoin market is very volatile and risky. So if you just open your mouth or write a few emails and let people know what’s going on, people would not panic like this and cause the price of a drop to $100.

The only reason why someone would do this, there’s only one reason that a chump CEO would allow the price of Bitcoin to fall like this at his exchange is that he’s being paid off. Somebody paid the chump Mark Karpeles off, so now he’s allowing them to have their way with his exchange, he’s freezing the Bitcoin prices.

So I would advise that if you are new to Bitcoin and you’re looking for an exchange to trade, you would avoid Mt. Gox totally or anything that is related to the chump Mark Karpeles. And then the other thing too is that if you have some Bitcoins here, I wish you the best of luck to give it out so that you are not being ripped off by Mark Karpeles and the Wall Street people that have bought him off.

Keep in mind guys that there are a group of people like myself and others who look at Bitcoin as a revolutionary technology to bring freedom and power back to the to the 99% on Main Street and take it away from the 1% that’s on Wall Street.

However, you have a small percentage of people that are in Bitcoin strictly for profit. The chump Mark Karpeles is one of those people that’s in this strictly for profit. He does not give an ounce of care for one minute what Bitcoin does or provides to the 99% of the people on Main Street, he couldn’t care less, he’s going to get away with the profits that he made.

And you may like what he does, you may not like what he does but he is in this to make a profit so we cannot blame him for doing what he’s doing, for taking the bribe and taking money under the table to crash the market artificially so that he can profit from it.

Do not think for one minute that Mark Karpeles is not profiting from this fiasco. He is profiting tremendously from this, you would have to be a complete total fool and moron not to make money from your own exchange that you artificially manipulate the price. That’s what market manipulation looks like and that’s what insider trading looks like folks.

And let’s go on to “How to identify Bitcoin manipulation using technical analysis”, I don’t say “using fundamental analysis”, because fundamentally Bitcoins protocol is as strong as ever. There’s nothing wrong with the protocol the transaction malleability issue that Mark Karpeles is blaming is the cause or the root of the problem has been known in the Bitcoin world since 2011.

Gavin Andresen – the chief scientist and head developer of the Bitcoin software and the code has already put out on his blog at TheBitcoinFoundation.org that the market the transaction malleability is not an issue. This issue with Mt. Gox is what he and his Wall Street buddies are doing to manipulate the market in order to acquire cheaper Bitcoins.

So enough of that about Mt. Gox, what are some options that you can do when the Bitcoin is being manipulated? What to do during a Bitcoin market manipulation, one is that you can just sit on the sidelines, fiat or cash and do nothing and just wait to see what after the dust settles before you jump back in.

The other thing is you can buy Bitcoin at a discount and you are going to take on greater risk, but there’s a potential for a greater reward so full disclosure here for myself personally, I bought more Bitcoins for several reasons one is because it hit my pre-determined price targets. So if you’ve been following me on my currency analysis series for a while now, you will know that I do not like to chase after a trade.

I buy and sell in advance of where I placed my order. So here’s my long-term trend line for Bitcoin. And some people say hey, you know the market is in a downtrend. It’s in a downtrend in a temporary wise but if you are long-term trader like myself when Bitcoin went from here to here, we are still in an uptrend.

The downtrend occurs when it starts to break like somewhere below here, then I might consider it to be on a downtrend but for now long-term wise for a multi-month possibly a multi-year trade or position, this is the ideal buy point for me because it’s near the support level down here and it’s hitting this right here, this is what I call confluence.

It’s not the picture perfect confluence due to the market manipulation going on but nevertheless, it is a confluence, so I loaded up on some more Bitcoins right there. So as I was saying back here, you can buy Bitcoin at a discount and assume greater risk, but there’s also a potential for a great reward.

Keep in mind that when you buy you have to ask yourself “Would you rather buy Bitcoins down here or would you rather buy it when it’s up to here or up to here?”. Me personally, the chart shows the last time when the price fell to here, it shot back up. It came down to here it shot back up. It came down to here right and shot up.

So there is a high probability that they will shoot back up again because it did here and here and so I would not be surprised if it does it again here, so I have to go by my past trading experience, I’m going to go long here. So the other thing that you can do is you can wait for Bitcoin to go back up. You will assume a lower risk, but the reward will also be lower also.

So what I mean by that is that if you wait for the price to break above this blue trendline pull back and hit that trendline again before you buy in, then obviously the reward will be a lot, because the price will be up here already.

The other thing that you can do is that you can look for opportunities in other cryptocurrency markets, like I would Nextcoin, Dogecoin and Litecoin. You can go over here to cryptocurrency market cap and you’ll notice that the top 10 here, you got a bunch of different ones. I would ignore Ripple; Ripple is not even a currency. I don’t even know why they put it here. Ripple’s just like a payment system. Ripple is garbage. I don’t see it going anywhere.

The reason why I say that is because it’s been sitting at number two for the last few months and the price is not going anywhere. Possibly down and that’s it, the trading volume is very low and I would not even waste time with this, and also Ripple is centralized in there.

Anyway, you got Litecoin, you got Peercoin, you got Dogecoin here and you got NXT and you got Mastercoin, all these. I will also stay away from Quark, simply because I got bills, still, I don’t like it when somebody is against cryptocurrency and all of a sudden they get paid off and now they’re supporting cryptocurrency.

So I’m not going to say which one you should buy, which one you should not but there’re two on here that I would avoid altogether.

One is Quarkcoin simply because the main guy that’s supporting it and pushing it was completely against Bitcoin and then one day they offered him a bunch of Quark, and then he starts pumping it.

And I would avoid Ripple because that’s actually a company like PayPal or Visa or Mastercard.They might have a different system but this is a business, I don’t even know why they put it here. That’s the other one. Here, they can be a pump and dump and but I don’t care if it’s a pump and dump, as long as I’m in on it when it’s making the move and I make money from it. So none of these coins.

The only one that I’m in there because of its revolutionary technology is Bitcoin. The rest of these is just all a crapshoot and you should not put money into it unless you can just throw that money away. If you cannot afford to send me that money for free and say “Hey Tai I appreciate all the currency analysis videos that you’re doing for me. If you didn’t do that, I would never do that.”

Then you should not take that money and invest in this. If you can see yourself taking money that you have and just giving it to me or some random stranger for free with no obligation, then you are welcome to use that money to invest in this, if you cannot afford to do that they do not do that. So I’m telling you how dangerous these cryptocurrencies are.

One thing that I can also say is that I’ll make a separate video on how I analyze cryptocurrencies but my two main rules of this are that I don’t invest in anything that’s below the top 10. The other thing too is the volume, it’s extremely important if something is below $100,000, it’s really tough to invest in that because there’s not enough liquidity. So be careful about that. I’ll figure out some more trade rules for trading cryptocurrencies later on.

Now, the two main ones that I focus on is that I don’t pay attention to anything that’s less than a hundred thousand and I don’t pay attention anything that’s less than the top 10. So let’s go back to the market cap. I don’t pay attention to the market cap of the total supply that does not mean anything to me. Those numbers have no influence on my decision to invest in a coin or not?

Let’s go back to the slides here. I want to say real quick guys because I want to make this Bitcoin and cryptocurrency risks disclosure because if you’re watching me and you follow me, I want you to be fully aware of the risks involved. Like I said, only use throw away money to invest in the cryptocurrency market, beginners should avoid the Bitcoin market altogether.

If you want to know how to trade, Bitcoin is not the market to learn how to trade in, you should go and learn about the Forex account learn how to trade in that, that’s much better. You cannot expect a 10% to 1000% gain without risk. That comes with the territory. You cannot expect to invest in cryptocurrency and you want 10% gain, 100% gain, 1000%gain and expect that type of gain within a month or a year and not expect any massive risk, you will incur massive risk to get that 100% or 1000% gain in a year.

BTC is not regulated or insured by anyone so you invest into it and you lose money. That’s your fault. It’s no one’s fault. Not my fault, not anybody’s fault. It’s your fault that you invested money in anunregulated security and unregulated financial instrument.

Bitcoin is designed to take power away from the banks so if you go to ask someone on Wall Street about Bitcoin, it’s a complete waste of time. That is high-risk, you were going to ask somebody that is against Bitcoin that is going to take them out of business and take money out of their pocket and take food off of their table.

They’re going to tell you what Bitcoins capability is so asking them is high-risk so never get financial advisor investing or trading advice from someone that works on Wall Street. They cannot own Bitcoins, most of them that work for big banks and big firms it’s not even legal for them to invest in Bitcoin in the US.

If you go and ask one of those people, when JPMorgan Chase, when Jamie Dimon puts out a statement that the Bitcoin is not good is not a good currency. He’s talking out his ass because, by law, he’s not even allowed to invest in cryptocurrencies because it’s against Chase Banks operating agreement and it’s against SEC rule for him to even buy Bitcoins. So how would he even know what a Bitcoin is?

So anybody that works in the bank like the people at Bank of America putting out statements talking about the valuation of Bitcoin, it’s illegal for those guys to even buy Bitcoins, in case you’re you live outside the US, in case you don’t know, if you work for a big bank or a Wall Street firm, there are rules and regulations that you have to comply by.

Let’s say that you work for Scottrade, Ameritrade, Bank of America there’re certain stocks and currencies that you cannot buy or invest in and you have to disclose it to them or else they can fire you from your job. So when you get a job with these Wall Street firm, you have to sign a statement saying that you will not buy certain stocks, you will not buy certain currencies and trade a certain way.

So the fact that these bankers are opening their mouth to talk about Bitcoin or what it’s capable of doing or not doing, they’re just talking out their ass because they’re not even allowed to even touch it in US laws.

So I hope that these risk disclosure statements help you in making the right decision when you invest in Bitcoin. Become a real Freedom Fighter, guys! Don’t just be one of those people that sit on the sidelines and whine and complain about the government and the banks and Wall Street.

Satoshi Nakamoto has given us the tools right in today’s world, we no longer need swords, spears and guns to fight off the enemy on Wall Street. We can now fight it using cryptography, using Bitcoin, using cryptocurrencies, using altcoins. That’s how we will take power away from Wall Street and bring it back to 99% on Main Street.

Sharing is caring! Leave some feedback guys! If you have any questions or comments leave it below this video. If you want to make coffee and beer donations to my freedom efforts and my blogging efforts, you’re welcome to make donations at prisonorfreedom.com/donations

 If you see someone that is panicking in the market and they’re not clear what’s happening with the Mt. Gox issues, please share this video and also if you have success from following my currency analysis videos, please send me screenshots and testimonies of your success.  Many thanks for watching this video and I look forward to seeing you again in the next video.

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