Peter Schiff warns that hedge fund trades against MicroStrategy (MSTR) could destabilize Bitcoin.
Notable critic Peter Schiff has raised concerns about the potential market manipulation by hedge funds as Bitcoin (BTC) continues to struggle to maintain its momentum, with its price trading sideways for more than three months.
Schiff suggests that these financial institutions may be conducting transactions that could have a significant influence on the stability of Bitcoin and MicroStrategy’s financial position.
Peter Schiff has identified an unsettling pattern in which Bitcoin’s value remains suppressed, despite the consistent influx of purchasing from 11 spot Bitcoin ETFs. This pattern suggests a potential orchestrated sell-off.
This situation raises concerns regarding the sellers in the market, particularly if these ETF investors begin to withdraw. Schiff posits that hedge funds may acquire Bitcoin and related ETFs strategically, not for long-term possession, but as a strategy to short-sell shares of Microstrategy, a company that is recognized for its substantial investments in Bitcoin.
This approach may be facilitating a more extensive market restructuring. A cascade of sell orders for Bitcoin would be initiated if hedge funds begin to liquidate their positions.
The price of Bitcoin would probably experience a significant decline as a result of this surge in sell orders. A downward trajectory that could affect shareholders and the crypto market as a whole could result from such a decline, which would place additional pressure on Microstrategy’s stock.
The notion of an imminent substantial price fluctuation in Bitcoin is substantiated by the most recent technical analysis. A phenomenon that is typically indicative of impending volatility is the continued tightening of the Bollinger Bands on Bitcoin’s 24-hour chart.
The asset may be undervalued, as Bitcoin’s price remains near the lower Bollinger Band.
Additionally, the Bull Bear Power (BBP) indicator remains negative, indicating a prevailing pessimistic sentiment in the market. This indicator indicates that the price is being pushed toward lower support levels by bear forces.
Nevertheless, market participants continue to monitor for any momentum shifts that could indicate a reversal. These reversals are crucial because they frequently precede significant market movements and could suggest either a recovery or a further decline.
