Bitcoin Aureate (BTG)'s cost is being manipulated by a whale controlling close to one-half of the circulating supply. These are the findings of an analysis conducted by an independent trader and annotator, who preferred to remain anonymous.

He published his findings in a weblog post, where he explained why he believes a unmarried group of people accumulated their way into a huge Bitcoin Gold position, and are now using that supply to control the market.

Accumulation through Bitfinex

The events started in August 2022, when Bitfinex margin long positions began its sharp ascent to include almost 2 meg BTG. The exchange makes its margin data publicly bachelor, which can help gauge the general trader sentiment in a particular coin — for case past comparing the ratio of brusque and long positions.

BTG/USD Longs on Bitfinex. Source: TradingView.

BTG/USD Longs on Bitfinex. Source: TradingView.

In Bitcoin Gold's instance, the stiff increase in margin positions was accompanied by lackluster price activeness. While the coin generally followed the broader crypto market, the cost eventually spiraled downwards.

BTG/USD on Bitfinex. Source: TradingView.

BTG/USD on Bitfinex. Source: TradingView.

The analyst estimated that the 1.9 million BTG held at some betoken in Bitfinex represents between 38% and 48% of its total circulating supply.

Bitcoin Golden was born in 2022 after a network fork from Bitcoin (BTC), thus maintaining its original history up until that point. This means that Bitcoin Gold contains at to the lowest degree as many inactive coins equally its parent, including Satoshi'south cache.

He further elaborated how he reached that effigy:

"Over 11 one thousand thousand Bitcoins (BTC) oasis't moved in the last year. Considering big wallets' unwillingness to merits their coins due to fear of private key leak for a minimal return, information technology tin be argued that a number fifty-fifty larger than xi 1000000 BTGs are inactive or lost forever."

He then estimated a figure of 4 to 5 million active BTG. When asked by Cointelegraph why he is so certain that this is the piece of work of one whale, he explained:

"The accumulation was very consistent and systematic over the course of nearly a year, information technology would be almost impossible for it to be a coincidence that multiple entities were using the verbal aforementioned system to accumulate."

The analyst as well conducted a manual analysis of the boilerplate entry price for the whale. By comparing the number of coins bought each day with their cost, he arrived at a figure of $22.86 as the interruption-even price.

Raking in profits

Post-obit the extensive aggregating, the whale began using its position to influence markets. In early January, Bitcoin Gold'due south toll rose in consecutive moves by up to 200%, from $5 to $15. Margin positions dropped precipitously but equally the upward movement was complete.

BTG/USD Longs with price superimposed. Source: TradingView.

BTG/USD Longs with price superimposed. Source: TradingView.

No major announcements were posted at the time on Bitcoin Golden'due south Twitter business relationship, which highlights the potential for fabricated price action. The analyst further noticed that Bitfinex's wallets were subsequently drained of a meaning chunk of BTG.

He conducted a test on Binance, which showed that it was non the destination wallet. A volume comparison points to Korean substitution Bithumb as the likely receiver of these funds. The analyst argues that this is part of the whale'due south "distribution" strategy, which would have external retail traders bring together in a fabricated pump to let the whale offload the coins.

Comparison of exchange activity. Source: Onlyforesight.com and TradingView.

Comparison of exchange activity. Source: Onlyforesight.com and TradingView.

The price was, however, held back from ascension due to a powerful "sell wall" on Bitfinex, around $15. The increased activity on Bithumb led the analyst to conclude that the whale could be Korean, as the exchange requires a national Social Security Number to create an account.

Chances of a coincidence

The sudden decrease in Bitfinex margin could also be explained past the whale divesting from BTG. The analyst argues that the trading group simply "claimed" its position:

"I think the whale was planning on selling on Bitfinex originally, and and then realized there wasn't plenty liquidity to leave there, so now they're forced to send their coins to another substitution (by first 'claiming' their margin position, and and so withdrawing)."

"Claiming" is the deed of settling a margin position by compensating the corporeality loaned in full.

These market place manipulation tactics have since been observed on Binance. As the analyst explained:

"Bitfinex acts as a suppression mechanism; every fourth dimension the toll tries to increase on Binance, Bitfinex holds it back. People (and bots) run across the difference, and try to pounce on the arbitrage opportunity. However, by the time people transfer their BTGs from Bitfinex to Binance, the gap has already airtight and the prices equalize."

This can exist conspicuously seen in February. ten trading. Equally shown in the picture below, candles on Bitfinex have a "clean cut" around $13.8, while the price on Binance clearly moved past the barrier.

BTG/USD on Bitfinex and Binance (orange line), H1 candles on Feb. 10. Source: TradingView.

BTG/USD on Bitfinex and Binance (orange line), H1 candles on February. 10. Source: TradingView.

The Endgame

Given the scale and amount of time invested into BTG aggregating, the analyst argued that the traders volition seek a substantial profit:

"Information technology is expected that the price of BTG will multiply in value from the current value of ~$12 (as of this post) and increment a substantial corporeality from the $22.86 projected breakeven toll."

He conjectured that a potential target could be $100, which could result in a maximum profit of $150 1000000. The current attempts at price suppression are necessary to not permit interest fire out too chop-chop, as the annotator explained:

"If the toll rises too fast, it'southward destined to downtrend for an extended period as people gradually take profits and there is no-one to buy upwardly the increasing supply hitting the market."

There are currently no signs that point to the Bitcoin Aureate team having anything to exercise with this market manipulation. The developers did non reply to Cointelegraph'due south request for annotate.