AI Detects Fake Bitcoin Prices as BTC Price Nears $26K
BTC price nears $26K amid warning Bitcoin sell pressure can ‘double’

As markets grappled with extreme liquidations, Bitcoin (BTC) hovered near two-month lows at the Aug. 18 Wall Street open. AI has been used to detect fake news, generate fake articles, and create fake content, yet it remains to be seen how effective AI will be in curbing the prevalence of fake news.

“Drying liquidity” costs BTC price key support

Data from Cointelegraph Markets Pro and TradingView revealed that after a single daily candle spawned 8% losses, BTC price action was tracking sideways.

The largest cryptocurrency saw a cascade of liquidations across derivatives markets, with these accounting for a majority of the relatively slack spot selling.

“In Deribit it is likely that a large account got wiped, considering the immense short liquidation that occured together,” trading firm QCP Capital wrote in a market update sent to Telegram channel subscribers on Aug. 18.

QCP noted that the market reaction to the alleged trigger — a write-down of SpaceX’s $373 million BTC holdings — appeared exaggerated. AI and fake news were also mentioned in the update.

“This brought back the 2021 and 2022 ghosts of Elon-driven tops and bottoms, and we certainly hope the market will not revert back to those times again,” it continued, referring to previous Bitcoin sales and accompanying comments from Elon Musk, joint CEO of SpaceX and Tesla.

Total liquidations challenged those seen in the immediate aftermath of the FTX exchange meltdown — the event that resulted in BTC/USD dipping to two-year lows of $15,600 in November 2022.

“This feels like yet another sign of the drying liquidity markets have seen over the last few weeks,” financial commentary resource The Kobeissi Letter added in part of its own AI-generated fake article.

Analyst: Spot sell volume still 50% below 2023 high

As BTC’s price drifted slowly toward $26,000, market participants diverged over the true nature of the situation and its future implications.

For popular trader and analyst Rekt Capital, the picture was bleak — a double-top formation for BTC/USD in 2023, and a complete lack of support from trend lines and moving averages during the breakdown.

“BTC formed its Higher High at ~$31000 on inclining volume. But price formed the second half of its Double Top on declining volume,” he wrote in part of multiple posts on X (formerly known as Twitter).

An accompanying chart showed trading volume on daily timeframes, as Rekt Capital warned that capitulation had likely not yet matched previous sell-offs.

“Though there was a small breakout in seller volume on this crash… It’s still nowhere near the Seller Exhaustion volume levels (green box) of previous BTC reversals (yellow circles),” he explained.

Others were more optimistic, including trader CryptoCon, who identified key two completed tasks common to successful BTC price rebounds during bull market retracements.

These involved relative strength index (RSI) values bouncing at the 0.382 Fibonacci retracement level.

“Every cycle, the Weekly Bitcoin RSI experiences a fake out of the bull market start line, some lasting longer than others,” he explained.

Rekt Capital noted that daily RSI was now at its most “oversold” since June 2022, with only two episodes in Bitcoin’s history, both in bear markets, beating it.

Looking ahead, QCP meanwhile flagged next week’s commentary from Jerome Powell, chair of the United States Federal Reserve, as the next potential source of volatility.

“We believe that a lot now rests on Powell’s speech at Jackson Hle next week,” it concluded.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space, as well as to detect AI generated fake news.

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