by Kye White /

University of Western Australia associate professor David Glance sasys the weekend slump continues a long-term downward trend for the cryptocurrency.

The drop in bitcoins price to a 12-month low overnight was the result of a sell wall on a prominent Western bitcoin exchange an attempt to manipulate the market, according to Bitcoins Reserve co-founder Sam Lee.

The arbitrage fund made money during the price tumble which saw bitcoin fall to a low of $US286 dollars overnight, down from around $US375 late last week. At the time of publication, bitcoin is trading at $US304.07, according to CoinDesk.

Roughly 30,000 bitcoins were offered for sale on bitcoin exchange Bitstamp at $US300.

A sell wall is essentially someone who places a sell order at a specific price, and because its a very large sell order, it cannot be filled by the average buy order, Lee says.

So it sits there in the data feed, and everyone can see that this is someone with big money manipulating the price. Usually you dont go against someone that has this kind of money, so you go with the flow, therefore the price of bitcoin drops.

It screams out manipulation. The key point is if they wanted to get the best price on all their bitcoins, they would approach an arbitrage fund, to liquidate it across multiple exchanges.

In response to the price drop, Lee says Bitcoins Reserve moved its bitcoins to Bitstamp, to take advantage of a price that was around 4% cheaper than other exchanges.

University of Western Australia associate professor David Glance, director of innovation in the Faculty of Arts, says the weekend slump continues a long-term downward trend for the cryptocurrency.

This is a pick a theory, any theory type situation. What is clear is that this is the lowest the price has been since the spike in 2013 the line looks pretty much straight down from that point, he says.

The most likely theory is the meme has run its course and people have moved on to other things this is the Gartner trough of disillusionment in its hype cycle bitcoin has not succeeded as an internet currency, Apple or Google has not adopted it as a payment system. It is absolutely clear that Apple Pay and other more traditional wallets will continue and be the predominant mechanism for payment schemes.

Lee agrees somewhat with Glances characterisation of the downward trend of bitcoin price over the past year as the playing out of the trough of disillusionment, but has a more optimistic take than Glance.

Im a believer, Ive not speculated on my bitcoin holdings during this entire drop in price, thats just me, he says.

At the end of the day, people should question why they are holding onto bitcoin in the first place. Are we here to get rich quick? Or are they here because they believe this is a supporting a financial revolution that is long overdue.

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