The end is near for Bitconnect
I have been writing about Bitconnect for the last few months, and predicting that bitconnect will collapse before 2018. I know it's impossible to predict with high accuracy when a ponzi scheme will collapse, but let's see how much information we can collect. The signs are all clear.
Bitconnect/Bitcoin divergence
The most important piece of information is the divergence between bitcoin and bitconnect. On the chart we see that bitconnect in terms of bitcoin was leading the way to bitconnect in terms of dollars. This means that people will buying bitconnect to lend it to the platform so they can earn interest. These particular assets had high correlation. This suddenly changed on around November 17th when prices started to diverge. There is a high pressure on sell orders (people selling bitconnect to buy bitcoin). There are divergences everywhere but this one is totally different, it can be caused by only one thing, people cashing out their daily interest and capital returns (those are lucky enough). Let me explain by
I never saw a slope like this before
I have seen millions of charts during the last two decades. I never saw something like this. Literally, never saw a slope like this where the sell orders are this slow and painful. This can only be caused by one thing, people cashing out their daily interest into bitcoin.
Sell orders vs buy orders
I gathered the data from bitconnect exchange. Since bitconnect exchange represents 95% of total trading volume, pretty much paints the whole picture. The data represent 3 hours and 50 minutes, around 19 pages. From the data i gathered there are in total 9545 trades, from which 8189 are sell orders, representing 85.8% of the total trades. In terms of bitcoins there are 132 bitcoin buy orders and 327 bitcoin sell orders. This means that within 4 hours 200 bitcoins could leave the platform.
A sea of red
Snapshot below represent the same data as analyzed above, I'm posting it just to visualize the data. See how rare are the buy orders. That should start worrying people who still reinvesting within the platform.
Making sense of the data
From the data I was able to gather, currently on average 200 bitcoins worth of bitconnect are being sold. That should mean that on average 1,200 bitcoins are being brought in a day. Those bitcoins could leave the platform for safety. Most likely not all bitcoins will leave the platform, a lot of people will still keep the bitcoin within the platform. Being generous I would estimate that only 40% of bitcoins will be withdrawn. A simple math, 480 bitcoin will be withdrawn a day or 10,560 bitcoins for the current year (next 22 days). That will represent $158 million.
Conclusion
I estimated before, and my current findings only confirming it. Bitconnect is very near its collapse and only a miracle could save it survive this new year. My gut was that people will start withdrawing their interest, and most likely principal too during shopping this season.
Only a miracle can save bitconnect, meaning that bitcoin has to keep rising. Everything is possible but it seems that this is going to be very unlikely since bitcoin is way overpriced right now. I would advise anyone to be vigilant, get your investment back before it's too late.
Follows and upvotes are appreciated :)
Disclaimer: The information contained herein is author's opinion, does not purport to be comprehensive and is strictly for information purposes only. This is not a financial advice. It should not be regarded as investment/trading advice.
There was a huge selloff today, right after interest payots. Proof that people are taking their profits out.
Well everyone is talking about their insecure wallets on Cryptocurrency.
#Sometime you should risk to win
I totally agree with you. It's impossible to make money without taking the risks. There is no such a thing as guaranteed win.
People have been saying this for 4 years and nothing but people making money. This is why the main investors put out bad info on bitconnect. Its a new way to manipulate the market. Just ask craig grant. I lost 12k in gold does that mean its not worth buying?
Bitconnect did not exist 4 years ago, most likely won’t exist after 4 weeks. I appretiate your imput, but gold and a ponzi scheme are two different things.
haha ok bro. Sorry 2 years misspoke. good luck with your investments god bless.
Agree 100%. A almost invested in that crap, but when I done my own due diligence, Bitconnect shown all the signs of ponzi scheme.
I’m glad you stayed away from a ponzi scheme. Hope your other investments are doing great.
:)