Bitcoin in the News : 2019-09 More++

In last week's post, Bitcoin in the News : 2019-09 Price, I noted,

September saw two distinct states of equilibrium separated by a sharp drop. The drop started roughly at 2019-09-24 0000, i.e. around midnight on 09-23, and lasted about a day.

An enlightening explanation for the drop was from Cointelegraph.com:-

A few speculators might have built up positions expecting the prices to surge following the launch of Bakkt. However, when that did not play out, they started closing their trades in a hurry. As a result, important support levels cracked and the rest of the traders were forced to close their long positions.

What did other experts have to say about the drop? Just like for previous 'Bitcoin in the News : More++' posts, I isolated all articles from a single source looking for a pattern. The following are all from Forbes.com:-

• 2019-09-23: Bitcoin Market Falls Sharply As Litecoin Suddenly Crashes • I first read that headline as a cause-effect relationship, but the article presents it as a coincidence.
• 2019-09-24: Bitcoin, Ethereum, Ripple’s XRP, And Litecoin In Shock Meltdown • 'The sudden sell-off, which wiped $20 billion from bitcoin's value and a further $5 billion from the combined value of the wider crypto market, was put down to the muted reaction to the launch of the hotly-anticipated Bakkt bitcoin and cryptocurrency platform.'
• 2019-09-24: Wall Street Paves The Way For Bitcoin To Become 'People's Currency' • 'Wall Street is working to ease Bitcoin’s volatility by introducing Bitcoin derivative products. Like the Bakkt Regulated Bitcoin Futures introduced this week.'
• 2019-09-25: ‘Striking’ Bitcoin Market Manipulation Revealed • 'New research has warned of a "striking systematic trend" in bitcoin price movements, with bitcoin falling far further than average ahead of CME's bitcoin futures contracts being settled each month.'
• 2019-09-25: Bitcoin Has Crashed -- What Now? • 'Back the direction you believe is the long-term outcome and buy the dips or don’t play at all.' • Why not go short?
• 2019-09-26: Bitcoin Price Sees Second Sharp Decline This Week, Falling Below $8,000 • 'Following a decline of more than 15% in an hour on Tuesday [09-24], the Bitcoin price fell another 8% Thursday morning [09-26].'
• 2019-09-27: Bitcoin Chaos Continues As Facebook’s Mark Zuckerberg Reveals Libra Woes • 'Facebook chief executive Mark Zuckerberg has revealed his libra cryptocurrency, which is largely credited with sparking bitcoin's bull run earlier this year, may not launch in 2020, as previously expected.'
• 2019-09-29: Bitcoin Mayhem Results In Mixed Messages • 'As bitcoin technical data looks bleak and bitcoin bulls advise traders to "buy bitcoin at every chance"...'
• 2019-09-29: Bitcoin, ETH, XRP, LTC, And XLM Sell-off -- Is It Overdone? • 'The losses spread across the entire market, with only 11 out of the top 100 cryptocurrencies advancing and 89 declining.'

There were other stories in September, but none were as revealing as the Bakkt fiasco. Maybe 'fiasco' is an overstatement. Time will tell.

Bitcoin in the News : 2019-09 Price

Last month's Bitcoin price chart reveals at least two stories. The first story is the third straight month -- encompassing all of Q3 -- when the price declined. Where the first two months of Q3, 2019-07 Price and 2019-08 Price, saw small declines, September's drop was substantial. The second story was a return to the type of chart last seen in 2019-05 Price, where I noted,

For the fourth straight month [...] I can use the same observation: the market is in a state of equilibrium, then something happens -- always accompanied by significant volume -- to move it quickly to another state of equilibrium.

September saw two distinct states of equilibrium separated by a sharp drop.

Bitcoin (BTC) Price Index

The drop started roughly at

2019-09-24 0000, i.e. around midnight on 09-23

and lasted about a day. As usual, Cointelegraph's Analysis category had nothing to say about the drop, but the service's Price Analysis tag had an article before the move signalling the 'long-awaited launch of Bakkt':-

2019-09-23: Price Analysis 23/09: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, ADA • 'If Bitcoin prices plunge and start a down move, altcoins are unlikely to run in the opposite direction to start a new uptrend. But if Bitcoin remains range-bound or starts a new up-move, then select altcoins are likely to continue their outperformance.'

The next 'Price Analysis' article was after the drop:-

2019-09-25: Price Analysis 25/09: BTC, ETH, XRP, [...] • 'The total cryptocurrency market capitalization had repeatedly taken support close to the $250 billion mark since mid-July of this year. However, the recent collapse in crypto markets led by Bitcoin (BTC) has broken the support and market capitalization has dipped to just under $220 billion. It is difficult to pinpoint the exact reason that started the fall. A few speculators might have built up positions expecting the prices to surge following the launch of Bakkt. However, when that did not play out, they started closing their trades in a hurry. As a result, important support levels cracked and the rest of the traders were forced to close their long positions. Another possibility is that the flight to safety following the news of an impeachment inquiry into United States President Donald Trump might have resulted in the quick drop.'

I don't believe for a second that the Trump impeachment inquiry had any impact on the bitcoin price -- why should it? -- so Bakkt deserves real consideration. Before looking at that, I'll interject the next 'Price Analysis' article, which summarizes the psychology around bitcoin trading:-

2019-09-27: Price Analysis 27/09: BTC, ETH, XRP, [...] • 'When Bitcoin (BTC) rallies sharply it does not leave a chance to buy. Traders then regret missing the bus. They promise themselves that they will buy on the next dip. However, when the prices correct, fear grips the traders and they again miss pulling the trigger. While there will be many reasons for a fall, unless the basic fundamental reason changes, traders should continue to look for buying opportunities.'

That analysis assumes that after a drop the next trigger will signal a rise, but it's more likely a 50-50 chance of a rise or a fall. Anyway, let's get back to Bakkt. This time Cointelegraph's 'Analysis' category had a relevant piece:-

2019-09-27: First Week of Bakkt: Slow Start Unlikely to Dampen Long-Term Prospects • 'After more than a year spent ensuring full compliance with the United States authorities, Bakkt, the first federally regulated platform for Bitcoin (BTC) futures trading, launched on September 23.'

Is that date, September 23, a coincidence? The article's next paragraph explained the Bakkt concept.

Conceived by the global trading giant Intercontinental Exchange (ICE) and counting a solid portfolio of investors from Microsoft’s venture fund M12 to Starbucks as its backers, Bakkt offers institutional traders something brand new. The platform’s value proposition is physically-settled BTC futures contracts, combined with a sound custodial service approved by the Commodity Futures Trading Commission (CFTC).

Unfortunately, 'trading volumes on the platform remain meager', and

Bakkt’s launch coincided with an immense slump in Bitcoin’s market price, leading some analysts to suspect a causal connection between the two.

'Causal connection' or not, the service's web site Bakkt.com ('Building the future of digital asset infrastructure'), points to a Bakkt blog post, We have liftoff: a milestone for the industry (medium.com), signed by its CEO Kelly Loeffler. For more about the service, see What is Bakkt? (coindesk.com).