BTC Google search trends may have been subtle price manipulation
Last week, the entire Bitcoin trading community may have been the victim of a clever “robot ruse” emanating from hackers in Romania. Last week, we reported that Bitcoin and BTC Google search trends had “gone through the proverbial roof in a big way, the highest recorded value for both the United States and for worldwide statistics, if that latter figure factors into any demand equation. If you comb through the data, as a few analysts are accustomed in doing, you would find that “BTC” outpaced “Bitcoin”. “
The black arrow points to last week’s activity for Google searches. The “Blue” line designates search trend data for Bitcoin, while “BTC”, its market call sign and depicted as the “Red” line, was blasting off from its launching pad, a rather weird occurrence, since public awareness of crypto call signs is somewhat well below the name recall percentages for crypto names, if recent polling figures are accurate. At the time of the “spike”, speculation was that the Blue line would play catch-up, but it did not happen.
Was this activity merely a market aberration or was something else going on behind the data? When analysts noticed the initial upper movement in this supposed “leading indicator” on Sunday a week ago, a rally did commence. Bitcoin had been languishing below $10,000, but it suddenly gained renewed strength and shot towards $11,000, as if propelled by rocket fuel, in much the same fashion as had BTC search volume. Analysts attributed the gains to positive news about the VanEck decision to offer a Bitcoin Trust to sophisticated and accredited investors, but no one was certain about that supposition.
Reporters at Forbes went on the trail to find answers. The first clue came from Bendik Norheim Schei, an analyst with Kryptografen, a website that specializes in bitcoin and cryptocurrency news and analysis. He had noticed that Romania had been the source of the initial search volumes. After digging a little deeper, another piece of the mystery emerged. Searches were mysteriously timed to be when normal traffic was in a word, asleep. Related search volumes were occurring between the early morning hours of from 4 am to 5 am in each respective country, a skillful way to amplify graphic impacts.
Schei’s comments to Forbes then illuminated the facts: “It is reasonable to assume that someone is behind these radical changes That the same pattern can be seen all over the world may indicate that VPN services have been used to distribute the search across the world, thus achieving a global trend. Google Trends points out that changes have been relatively large in Romania. Is this the source, or is it just because there have been fewer searches for BTC previously? Whatever the answer is–something very strange has happened to the interest in the keyword ‘BTC' this past week.”
Speculation then shifted to an overt attempt at price manipulation by a hacking gang that obviously understood more about the burgeoning Bitcoin market than most investors that have positions at the moment. Word about Google search trends favoring Bitcoin can spread quickly and result in strident market movements, as if this bit of data were a confirmed leading indicator. Some traders and analysts also go so far as to program sophisticated “robots” to react to the slightest up-tick in Google search volume, as well.
Forbes then spoke with Glen Goodman, a trading veteran and crypto author, who confirmed that: “Somebody's trying to game the trading algorithms. There are algorithms programmed to look at Google Trends data and try to find correlations between numbers of searches for the word ‘BTC' and the movements in the bitcoin price. If they detect patterns, it may be profitable to trade off that data. This hacker may be buying some BTC, then sending a ton of ‘BTC' search queries to Google, the algos see search numbers have risen and are triggered to buy a lot of BTC which pushes the price up, and the hacker then sells their BTC at a profit. Easy money!”
Easy money? Where are the regulators when you need them? Crypto markets remain fertile ground for price manipulation tactics, especially when markets are global, access to a local exchange is easy, and nearly all trading activities do not benefit from regulatory oversight or monitoring processes that can detect potential attempts to game the market. For the time being, be careful trying to jump upon a wave based on spurious data or suspected leading indicators, even if the propositions sound plausible. It is always better to grab onto a confirmed trend and then ride it for all that it is worth.