On December 24, Bitcoin analyst under the nickname Bitfinex'ed has published a report in his blog on Medium, in which he described a bot named Picasso, who could be manipulating Bitcoin prices on the exchanges. The analyst was monitoring Coinbase, GDAX and Bitfinex since noticing suspicious activity back in May, and was recording GDAX activity along with Bitfinex for the past several months.
Bitfinex'ed states that Picasso could have evolved from Spoofy, a previously identified trade bot. But Picasso is using a different strategy, called "painting the tape", which is an age old tactic by traders to artificially manipulate prices.
Bitcoin analyst has published a video, showing activity from GDAX and Bitfinex from December 7 of 2017. As it can be seen on the video, Coinbase prices for Bitcoin went several thousands of dollars up compared to the rest of the market, and Bitfinex'ed claims that the volume and price volatility is not from organic demand, but from a trading bot that hit an empty orderbook.
The volume on Bitfinex plummets to practically zero when Coinbase went down, indicating this bot is ‘replaying’ or doing arbitrage for transactions from Coinbase, on Bitfinex. Someone buys Bitcoin from Picasso on GDAX, Picasso then buys it back, at a massive discount on Bitfinex. No GDAX volume = No Bitfinex volume.
Moreover, Bitfinex’ed noticed that the activity of Picasso was mostly high when Bitcoin Cash was introduced as the bot drove the price of Bitcoin Cash to 200+% higher than the rest of the market within several minutes, due to the order books being practically empty.
At the moment of press, these are main market parameters of Bitcoin:
- Average price: $13 867,90
- Marketcap: $232 457 900 170
- 24h volume: $10 630 400 000