Traders assess how narratives sway bitcoin’s price

Certain large players can stoke bearish sentiment in the crypto market by spinning news to their advantage, according to Tony Stewart, founder of Pelion Capital.

Snap decisions based on headlines without deeper tldr.
This is the CT way.
In this case, Bears will push narrative lower until momentum repels, Bulls will hedge/cut/take a paper loss until resolved.

Whereas the larger houses should all know by now.
They’ve read the details,… https://t.co/sn9QBSe3Q2

— Tony Stewart (@PelionCap) January 9, 2025

At the end of last week bitcoin dropped below $100,000. The catalysts were:

• fears about sticky inflation in the United States and a jump in Treasury yields;
• the closure of traditional markets on 9 January due to mourning for former president Jimmy Carter;
• reports that the Department of Justice obtained permission to sell Silk Road bitcoins worth about $6.6bn.

According to Stewart, in TradFi such uncertainties “clear up within an hour”, but in the digital-asset market the process is far slower.

“When the timing is ‘perfect’, I always suspect a game,” the trader said.

Brian Rass, chief investment officer at 1971 Capital, told Cointelegraph that there are groups of players influencing price. However, with bitcoin’s current market capitalisation of $2trn, manipulation has become much harder, he stressed.

On the lack of trading in spot BTC ETFs on 9 January due to mourning, Rass noted that they account for only about 3% of the roughly $50bn in total daily volume.

The value of the Silk Road bitcoins comes to 13% of that figure, and their sale could have a material impact, he conceded. However, Rass considers a one-off disposal of the entire stash highly unlikely. The assets could also be sold over the counter, the expert added.

The founder of Pear Protocol, who goes by Huf, likewise believes bearish headlines have more impact on crypto prices than the events themselves. The latter, as a rule, are already priced in.

“Here’s my playbook, guys. When the US DOJ coins move to Coinbase Prime (Arkham alerts), we buy that dip. Because the assets are likely already sold,” the expert said.

Earlier, CryptoQuant analysts concluded that panic selling on negative headlines offers an excellent chance to buy bitcoin “on the dip”.