As we predicted, the media has gone to town with reports of Bitcoin trading well over 20,000 dollars, and like clockwork, the price had a deviation to the down side followed by a rip back to the upside.
We have already commented prior to this news about a return to volatility for Bitcoin after a period of stagnating price action. We also noted that the media will use the Iranian narrative to justify some sort of upside volatility. Most importantly, we noted that the volumes for this volatility will be muted and much less than people expect.
You see, the market is in a state of arrest. It is entering a period of consolidation where there is neither long or short sentiment at large. What is likely happening, is a consolidation of a position ready for a bigger multi-thousand dollar move out of the 7500-6500 range we've been stuck in for 2 months. This may continue for a number of months further and during that time, any opportunity to capture some liquidity for the large-interests will be capitalised on.
The initial reports of the Iranian Bitcoin price being over 1 billion Iranian Rials (equivalent to over 20,000 USD) was quickly circulated and people looking for "news" to explain the pump got their answer. Sadly, it is -all- engineered to sucker in as many gullible, uninformed people as possible. The kind to let their trusty news media pundits do the due diligence (what due diligence) and just hop on the wave for a ride.
I'm sorry to point this out, but the media is wrong. And thanks to the majority of people having no ability of performing proper due-diligence, the media outlets held their story untouched for over a day before the more intelligent members of the community started pointing out the problems.
Iranian price of USD is not the same depending who you are
The government price for USD in Iran is 42,000 IRR
The people's price for USD in Iran is 138,000 IRR
If the BTC price in IRR is 1,040,500,000 then we simply take 1,040,500,000 and divide by 138,000 to get 7539. That means, the effective "people's" price of BTC is 7539 USD. The rough price of Bitcoin on spot exchanges right now.
There was a narrow window where the culprits of this spreading of lies could capitalise on the fake arbitrage opportunity but here, we know better than that!