How Mr. Manipulator Stole All Your Ethereum (ETH)

Published in

Coinmonks

10 min readFeb 24, 2019

Many, many, many traders in the cryptosphere just got what we call “REKT.” Here’s how it happened.

Last night (2/23/19) optimism was at an all-time high, even the staunchest bears were relenting in their aggression and every short-seller stopped trading since they smashed their keyboards against the wall. Then, out of nowhere this morning (2/24/19), a chasm of biblical proportions opened and price fell almost 17% in 15 minutes. Triggering liquidations all the way down.

Now, the retail traders, with dashed moon shot hope, are left trying to figure out what happened. Suffice to say from the image above, some traders are having a really, really bad day.

[Disclaimer: I did not trade this move up. I did not believe in it. I missed out on some really nice profits. I ate dirt on a short. So, this is not a proclamation of my superior trading skill, I will not show you “dah whey” and I do not claim superior knowledge. So, my view here is defeasible. I also understand that Bitcoin price drives the rest of the market. I also understand that Litecoin led the way. So, I’m super happy to hear your feedback, but I get it. Just know that you can look for these types of developments in the asset you’re trading and you’re probably sure to find it!]

[Note on disclaimer: I feel like the “Hey, I’m not God and I’m wrong a lot disclaimer is a lot more important than the “this is not financial advice disclaimer” …moving on.]

Now, some people call them Algos, other call them Whales, still other call them Market Makers. No one really knows except the exchanges. But, for the purposes of this story, I’ll call them (or more specifically “him”) Mr. Manipulator.

In The Beginning

This is the story of how Mr. Manipulator rekt Mr. Retail. Here’s the best part… It’s a picture book! Let’s Go!

1) Evidence For A Move Up

This wedge might not be drawn the way you drew it, but however you drew it… there was a wedge. You can see the fib and price support, plus it was near the $100 level, which every YouTuber will tell you… is a psychological level. Right? Anyway, if we could break OVER the wedge, there would be LIFE breathed into the market. There was a fair bit of evidence that a move up was next.

2) Breakout and Retest

We’re now zoomed in on the 5m chart. I’m sorry these pictures are hard to see. I will describe them and put Tradingview links at the bottom. I fine tuned the wedge, but to be honest, that top trendline was really ugly and I’m pretty sure that, at the time it was developing, I redrew the trendline eight times. But, however you drew it, the breakout and retest happened here and as the market gods say, “It was good.”

3) Then Strength Is Shown

We’re still on the 5m chart. What we see is two 5m candles wherein 20k ETH was bought on each and produced a 3% move up. After the first batch was bought, the resistance line held as support. The second batch busted another resistance level with a 4.8% gain. When you see 20k ETH bought in less than 5m (often these are 1m candles), it wasn’t the market participants. It was Mr. Manipulator. Here he introduces himself by buying up two batches of 20k ETH (40k total).

Recap: 40k volume. Roughly a combined 7.5% gain.

4) It Holds! Let’s Eviscerate That Wedge

So the wedge is broken, we’re breaking resistance, and holding it as support. This signals a lower high could be in! Now it’s time for Mr. Manipulator to get the moonbois excited, remove all doubt that we’ve just started a new leg up and, obviously, let everyone know THE BOTTOM IS IN!!!

You can see Mr. Manipulator does this by just punching through the order book, buying through resistance levels and to see if they would hold (labeled “Kickstart whale buys” and “Accelerator whale buys”). Now… you can see the red candle, where another party decided this was the spot to sell and/or short. Well, they’re clearly a big player too, but they were wrong. The market wanted a move up, they just needed some reassurance that wedge was really broken.

Price holds support each time, so Mr. Manipulator knows it’s cool to go all in. That’s a 3m chart. In 1hr there was 81,000 ETH bought (…and sold. But, let’s not get nerdy about the Volume profile or this will turn into a book). This took over an hour but you can see the giant green candles. Those happened in a span of about 15 minutes. This is Mr. Manipulator buying. He is now joined by breakout traders and our crypto spec-ee-ality, FOMO retail buyers.

Recap: 81k volume, 12% gain.

5) Eternal Consolidation

Watching the consolidation that followed that move up was about as interesting as watching paint dry. We didn’t even include a picture of it. Just looking at it could drive you away from the article and you’d miss the end of the story. What we have here is the 3m chart of the important points: Resistance formed at the 119 level and Twitter became a battlefield with the bulls and bears drawing their battle plans (charts) to shame the other side with. I was on the bear side of the battle lines. Laying low in the trenches with my Bart charts in full force. Then, Mr. Manipulator decided enough was enough and smashed the Market Buy button and scooped up another 13k ETH in a 3m candle. The bulls piled on and that 119 resistance level became support.

Recap: 13k Buy. 5.5% gain.

6) The Bears Get Loud and the Bulls Get Serious

Now with $123 being our resistance line, a very significant one at that, the bears cranked up the volume. Some big sells punched down through the support line, but it was bought back up over support. Some of them were big. So, either someone was getting out of longs or into shorts… Either way it was a bad plan. Whoever that was either missed out on gains or was betting the wrong direction (like ME!).

Then another 5k ETH buy happened that made good progress, but it closed under resistance. More sideways ensued. Then, another 3k ETH market buy order pushed price over the $123 level and it held. Again, the breakout traders jumped in and we saw 15k ETH get bought in a 3m candle, likely by Mr. Manipulator. Then it consolidated up there as the retail FOMO bought up another 7k and shorts were covered by the very angry bears. Price corrected, falling off pretty rapidly, but it finds support and there is a strong reaction off the $123 support to the upside! “Then, the unthinkable happened” Well, not the unthinkable, but I remembered that line from the trailer of “A Series of Unfortunate Events.” But, at any rate, the market participants made Mr. Manipulator’s day!!!

Recap: 23k ETH bought. 3.4–5% gain in price.

7) It’s a BULLLLLL Market Everyone!

The RSI and Stochastic are now dead. May they R.I.P.

This move up is slightly different than the move up from Slide 4 (the first 12% move up). Can you tell the difference? Here we see what a Wave 3 is supposed to look like. The nice gradual slope (3m chart again), the flow of beautiful waves created by all the bulls piling in the clown car called the Cryptocurrency Market Cap and the ebbs of those who took profit on the way. It almost looks like Mr. Manipulator didn’t have any money left to join this party. He didn’t show up at all. But, of course, that makes sense. Remember? He’s already bought 150k ETH or thereabouts… under $123.

So the retail traders are in the game and Twitter and YouTube is on fire. Every momentum indicator exploded, destroying the LCD screen of every Bear in the market… (yea, it was just the bear’s monitors that exploded… weird). Everyone’s screaming. “The bears are dead!” “The bottom is in!” Unless, you go to the pragmatic accounts. They just innocently ask the question, “Could the bottom be in?” Same thing if you ask me, but we can’t say they were wrong.

The bottom line: the retail money piles in, increasing the value of Mr. Manipulators stack. Isn’t that nice of them!

After a while, the buyers became exhausted and price consolidated into a triangle. Traders took profits (good on ya!), YouTuber’s were speculating about when all-time high will be broken, and everyone’s talking trash on the bears in the Twittersphere. It was good times. Most importantly, the breather that the market took from all those gainzzz allowed the Bulls to re-draw their charts to reflect BTC going to $5k and $250 ETH, because that makes sense now!

Recap: A LOT of ETH was bought. 26% gains.

8.) Unlimited Upside Potential. Potentially.

Not too much unexpected happened here. The above image is from the end of the triangle. We did see a 16k purchase on the 5m chart that indicates Mr. Manipulator got a little greedy here. To be fair it was a triangle, this last leg up could be reasonably expected, and that would make bulls even more bullish, so why not. It’s the perfect place to set a trap. This move had the desired result. We broke another resistance level and everyone who had previously fought for the bear side, though being in searing pain and agony, relented and became new Bull Recruits. After all, no one wanted to miss out on the next bull run! So the FOMO Wave 5 was born and led to another 7.5% gain.

Recap: 16k buy. 5% gain. Followed by a 7.5% gain.

9) Mr. Manipulator Gets Paid

Well, this story has gotten long, but you got the play by play of how the Bull Market of 2019 began. Oh wait... What’s that Mr. Manipulator? Well guys, apparently Mr. Market Manipulator decided he has waited long enough to fulfill his fantasy of rolling around naked in a massive pile of cash. So, he’s cashing out. So, that’s how our story will end: Mr. Manipulator liquidates everyone he can and steals profit from the rest, selling all his ETH.

Rekt.

Recap: 143,000 ETH sold. 18.75% drop.

That’s the story.

Now, to be fair, according to Elliott Wave rules, this move was done. In Elliott Wave jargon this move up was likely a “Wave C” of a “Zigzag.” Wave C is typically a .786 extension of “Wave A.” It also cleanly completed a standard Elliott Wave “5 wave” move to the upside. Beyond that though, price was also bumping up against the old high. There were pitchfork lines, trend lines, support and resistance lines and an endless array of other tools that said the top was in. But at the same time, Mr. Manipulator knew all that. So, he got out while he could.

Now, I’m not asserting the bull move is over, that we go to new lows, or break new highs. That’s just what happened up to this point. It’s clearly too early to tell, but this move has got to make the bulls nervous. The losses and liquidations that took place were enormous! I hate to see that happen to anyone.

If you were a bear like I was, it is always important to remember “the market can stay irrational longer than you can stay solvent.” Especially in crypto. Sometimes you have to be wrong for a long time before you can be right. If you were a bull, I hope you made money on that leg up. But remember… bear markets do not end by heading straight down… then straight back up. It just doesn’t happen, not even in crypto.

Hindsight is 20/20. That’s what this article is about. Obviously, if the market headed higher this article wouldn’t have been written. Again, I’m not claiming some “correctness” or asserting my own, personal brilliance. I just hope that through this you have gained some insight in how to spot Mr. Manipulator’s activity and know a failed rally when you see one. Most of the time you don’t want to bet against the trend! It can last a lot longer than your margin ratio. But, there are always clues that will tell you when the top is in. Hopefully this gives you some clues you can look out for next time.

We’ll see you at the end of the bear market. May the trend forever be in your favor.

Thanks for reading. I enjoyed writing it. Give it some claps if you got to the end and you can follow me on all the social platforms. I’m KurtSmock pretty much everywhere. Also! You can tell I’m into Elliott Waves. I’m not the guy to follow for that. If you want to learn more about Elliott Waves you should follow @crediblecrypto on Twitter: https://twitter.com/CredibleCrypto He’s one of the best out there!!

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How Mr. Manipulator Stole All Your Ethereum (ETH)

In The Beginning

That’s the story.

Written by Kurt Smock