Tech 7 September 2018Erik Gibbs
AI tracks unusual activity ahead of recent price drops, experts find
The recent news that Goldman Sachs was backing off plans to introduce a cryptocurrency trading desk had serious ramifications for the market, resulting in an immediate downward spiral. Just prior to the announcement, analysts monitoring the cryptocurrency markets saw someone take a short position worth 10,000 BTC during a time when the markets were showing a bull run and this has led to many asking why someone would take a short position of $74 million so suddenly. Now, artificial intelligence (AI) technology reveals that the move could have been deliberate market manipulation, CCN reported.
Data scientists and analysts from the team at RoninAI, a crypto signals group, began to dissect the situation, looking for any possible clues. One indicator, that of social sentiment, was extremely sporadic just prior to the drop. Looking at data from the three days leading up to the drop, there was an increase in activity that doesn’t appear to be authentic.
The analysis showed that there were three standard deviations above BTC mean levels. Based on historic data, these are not events that occur naturally in the market. About 10 to 15 minutes prior to the morning drop seen Wednesday, there was a break above the three deviations and these, due to their timing, have led scientists to conclude that they were not natural.
Social media has been alive with conjecture and speculation regarding who could have been behind the activity. Many have chosen to point the finger at Goldman Sachs, with one user on Twitter saying, “This got market manipulation written al over it. Bet ya Goldmans gonna [sic] be the first to scoop up cheap BTC 2 make a killing. They playin [sic] us like fools. #btc #crypto Goldman drops bitcoin trading plans for now…”
Whether or not they are a sign of market manipulation or insider trading cannot be determined. Of, if it can, the scientists won’t say. Who is behind the manipulation is still unknown. More than likely, at some point, the individual will have to buy the 10,000 BTC back, which could help boost the price. Unfortunately, however, there’s no way of knowing when this might take place or what impact it will have on the markets.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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