Professional traders are taking advantage of FUD to short the market
Another day, another ride on the crypto carousel — which isn’t for the faint-hearted. Bitcoin — which the other cryptoassets are stubbornly following — was holding the £6.6k ($9.2k) support level fairly well, despite some frightening moments touching £6.5k ($9k).
Our take on this is that the new investors in the space don’t have enough time to analyse what’s happening. The amount of fake or misleading information reported over the past few days, as discussed in yesterday’s report, made the ‘regulation meets Mt. Gox dump and Binance pump’ narrative far too scary. So much so, in fact, that even the more dedicated (but less sophisticated) traders believe it.
On the other hand, more people may just be losing trust — or finally realising their losses for cash — as the good old ‘hodl’ becomes less appealing for professional investors. This could be seen at 01:00 GMT today where, after failing to break above the £6.8k ($9.4k) resistance, bitcoin’s price started to tumble down to the £6.2k ($8.6k) area, which is a key support zone that we identified yesterday.
This dip no longer looks like part of a consolidation phase, but so long as bitcoin doesn’t drop below £5.9k ($8.1k), it will still be within the long-term log channel initiated in early 2017. While it’s fair to say that the Mt. Gox sell-off likely contributed to the January and February drops, it had nothing directly to do with the current bearish reversal.
This reversal is further catalysed by two trends; namely profit takers focusing on making more fiat currency and Bitcoin maximalists focusing on making more BTC. This is why alts are not breathing, with ‘cheap coins’ having lost between 70% to 95% of their market value and ether falling to its lowest level since the February 6th crash. Ether’s drop can also be attributed to factors other than following BTC, however, such as the fear of increased regulatory risks for the project.
In brief, the bulls are in despair — although one of the more neutral and most respected bulls still believes that we are on track to hit £23.9k ($33k) by July, so long as we bounce above £5.4k ($7.4k). Dropping below that level means that the bears are looking at the next confirmed level of support — £4.4k ($6k). If that fails, it seems like the £2.9k ($4k) scenario could play out!
The Swiss Blockchain Leadership Summit starts today in Zurich. This time there is no need to use Twitter — you can follow their livestream here.
The popular Arizona bill that we have been following — which will allow state residents to pay taxes with cryptocurrencies — has passed its 3rd test.
Did you know that Sierra Leone just used blockchain technology to assist in their recent elections? Read all about how the process was made more efficient.
Did you know that Delegated Proof of Stake could help solve the scalability problem of distributed ledgers? Download Multicoin Capital’s report to learn more.
Did you know that ‘cryptoeconomic primitives’ are just ‘tokenized economic games’? If that sounds confusing, clarify everything in this Medium article.