The past week has seen a significant sell-off across the markets with Bitcoin (BTC) losing more than 10% of its value. Other cryptocurrencies have been showing Bitcoin and cryptocurrency investors have taken a beating this week, with $50 billion wiped from the combined value of the world’s cryptocurrencies.
The bitcoin price, which touched $12,000 per bitcoin earlier this week, dropped to just under $10,000 before rebounding to around $10,500, mirroring The Bank of England has updated its stance regarding cryptocurrency regulation.A virtual meeting was arranged by Brooking Institute where the governor of XRP has been hit hard by the recent market-wide selloff, with the cryptocurrency’s price erasing the vast majority of the gains that it has been able to gain
The past week has seen a significant sell-off across the markets with Bitcoin (BTC) losing more than 10% of its value. Other cryptocurrencies have been showing even more weakness as Ether (ETH) dropped by 30%.
In addition, the commodity and equity markets have also slid as the Nasdaq had a significant red week as well. The next step for the markets right now would be finding a bottom structure. Let’s look at the charts.
Crypto market daily performance snapshot. Source: Coin360
The daily chart shows that the price of BTC is resting on the previous resistance zone of $10,000. This resistance area was established during the sideways action after the Bitcoin halving in May.
BTC/USD 1-day chart. Source: TradingView
Clearly, the previous range support at $11,100 was lost, after which Bitcoin wanted to participate in the World Championships of Nosediving. However, it was not unreasonable to expect such a drop as the chart shows.
There’s no clear area of support between $10,000 and $11,100 so it’s not unexpected to see this area break down toward the previous resistance zone at $10,000.
BTC/USD CME 4-hour chart. Source: TradingView
The CME chart still shows an open gap between $9,600 and $9,900. These gaps are often filled, and the argument that the bottom may be found at $9,600 is certainly plausible.
However, as the chart shows, if the price of Bitcoin shows weakness through the weekend, a potential new CME gap can be formed.
The price of Bitcoin closed at $10,625 on Friday evening with the CME futures. So if the price opens on Sunday evening lower than $10,625, a new CME gap is likely. In other words, this potential gap could fuel a relief rally to the upside.
At this point, a potential short-term bottom may be the case, which means a relief rally can be expected.
However, whether it will be the final bottom for this recent correction is up for debate. But a few scenarios can be derived from the current chart. The scenario anticipates a potential filling of the CME Bitcoin futures gap.
BTC/USD 2-hour chart. Source: TradingView
This scenario anticipates a potential bottom formation around this gap, after which a bullish divergence would confirm a short-term trend reversal. The crucial pivots here are the support around $9,600, after which a bounce has to occur off the gap, and the $10,000 area needs to be reclaimed.
If that scenario plays out, the CME gap is closed, and the market might have formed a bottom as far as this correction goes.
Once the $10,000 is reclaimed and the CME gap is closed, then a retest of higher levels becomes more likely than a further downward correction.
However, if the CME gap doesn’t stop the drop, the following levels should be watched for potential areas of support.
XBT/USD 1-day chart. Source: TradingView
In case of a further drop beneath $10,000 and the CME gap, the primary support levels are found at $9,400-9,500 and $8,800-9,100. These levels should serve as short-term support areas, after which a relief rally could occur.
Overall, the markets are looking shaky and investors should be cautious about entering trades in general before a clear construction can be seen in the charts.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
‘Worried’ Bitcoin Bull Michael Novogratz Warned Over Speculative Crypto ‘Frenzy’
Bitcoin and cryptocurrency investors have taken a beating this week, with $50 billion wiped from the combined value of the world’s cryptocurrencies.
The bitcoin price, which touched $12,000 per bitcoin earlier this week, dropped to just under $10,000 before rebounding to around $10,500, mirroring the ups and downs of the U.S. stock market.
Ahead of bitcoin’s wild price swings, former hedge fund billionaire-turned crypto investor, Michael Novogratz, warned crypto’s “speculative frenzy” was getting carried away.
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The bitcoin price has swung wildly this week, losing around 10% of its value since Monday.
“I’m trying to stay as optimistic and bullish as I can on crypto, because it’s really early in the cycle, but give the warning that there are other things in the markets that have me worried,” Novogratz told financial newswire Bloomberg earlier this week, pointing to “too many markings of what a top looks like.”
Novogratz, the founder and chief executive of crypto merchant bank Galaxy Digital, named electric car-maker Tesla
, which has led the stock market higher in recent weeks, as a cause for concern and branded Tesla’s soaring stock price “a bubble.”
Alongside Tesla’s stimulus-fueled rally, plucky investors have poured billions of dollars into new cryptocurrency projects in recent months, with many decentralized finance (DeFi) tokens promising sky-high rewards.
Many tokens tied to DeFi platforms crashed over the last couple of days, with the flavor-of-the-week, Sushiswap, losing more than half its value.
“High-flying DeFi coins took the biggest hit during yesterday’s sell-off with many being down 20% or more versus bitcoin over the 24-hour period,” Tim Plakas of Galaxy Digital Trading said via email.
“It was almost a mirror image of what we witnessed in the equity markets yesterday, with many popular tech names getting hit hard as sentiment shifted.”
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The bitcoin price has bounced wildly this week as stocks retreated from all-time highs, led lower by … [+] tech giants.
Despite what he calls a “speculative frenzy” emerging over recent months, Novogratz is still bullish on bitcoin in the long-term.
“I’m positive that in ten years, the ecosystem around bitcoin and cryptocurrencies, the whole space, is going to be multiple times bigger than it is today,” said Novogratz, who describes the emerging crypto space as “a sandbox” that should be put in the “broad venture capital bucket.”
“Cryptocurrency is here for good,” he added. “I couldn’t say that in 2017, or 2018, but that sentence comes with an exclamation point starting this year.”
Author: By Billy Bambrough
Bank of England Says That Cryptocurrencies are Unsuitable for Payment – TCR
- The Bank of England has updated its stance regarding cryptocurrency regulation.
- A virtual meeting was arranged by Brooking Institute where the governor of the Bank of England, Andrew Bailey and many others elaborated their views on stablecoin regulation.
- Bailey says that stablecoins require immediate global response as their popularity keeps on increasing.
Proper cryptocurrency regulation is something that many national banks are working on. Recently, the Bank of England has updated its stance regarding cryptocurrency regulation. A virtual meeting was arranged by Brooking Institute where the governor of the Bank of England, Andrew Bailey and many others elaborated their views on stablecoin regulation.
Bailey says that stablecoins require immediate global response as their popularity keeps on increasing. He had clarified that crypto assets like Bitcoin are not suitable to be used as payments for buying or selling things. It seems like BTC has failed to convince him that it can be a great investment option. This is because their value can fluctuate very quickly and to a very big extent. New innovations bring new regulatory challenges for high risk firms, which compromise their ability of providing a safe regulatory framework.
Previously we have seen nations like Russia who have banned the use of cryptocurrency in exchange of products directly. The governor of the Bank of England has clarified that if stablecoins are to operate as a form of payment system then proper they must have similar regulations that are similar to the other form of payments and the money that are transferred through them. Moreover
the governor mentioned that the current stablecoin regulations do not have a provision for legal claim. Hence, stablecoins must have a proper framework that supports protection protocols and enables the coin holders to readily claim and convert stablecoin to 1-1 fiat currency.
The senior regulatory lawyer at law firm Ashurst, Bradley Rice has said that the Central Bank and government mustn’t give up their authority over controlling the monetary policies and its reserve currency to the private sectors, especially if they are not located in the UK or are foreign based. He clarifies that this is a marathon which means they have a long way to go. The Central Bank has also started exploring the world of Central Bank Digital Currencies (CBDCs). In March it released some deep discussion papers regarding the potential of CBDCs to change payment systems. Back in June, L3COS, a blockchain based firm submitted a proposal to the Bank of England regarding a blockchain-based operating system that would back these CBDCs.
Author: By Ritika Sharma
Analysts Flip Bullish on XRP as It Plunges to Key Support Level
XRP has been hit hard by the recent market-wide selloff, with the cryptocurrency’s price erasing the vast majority of the gains that it has been able to gain over the past several months.
These gains were hard-fought by the cryptocurrency’s investors and came about in the form of a slow grind higher.
The resistance found throughout the lower-$0.30 region proved to be insurmountable, however, and the cryptocurrency was forced into a prolonged consolidation phase within the upper-$0.20 region.
This trading range was broken below yesterday, as XRP was unable to avoid the headwinds that were created by the massive inflows of selling pressure that dragged Bitcoin to the sub-$10,000 region for a brief moment.
This BTC movement sent shockwaves throughout the entire market, causing major and smaller altcoins alike to post massive losses.
As for where it may trend in the near-term, analysts are noting that the support it has reached is quite significant and may allow it to rally higher in the days and weeks ahead.
At the time of writing, XRP is trading up just over 1% at its current price of $0.24, marking a massive rise from its recent lows of just over $0.23 that were set for a brief instance this morning.
The cryptocurrency’s current weakness comes as Bitcoin struggles to maintain its position within the $10,000 region, as bears conducted another selloff this morning that sent it reeling down to lows of $9,900 before it saw a sharp rebound.
XRP’s descent fist kicked off a few days ago when its price ran to highs of $0.30, at which point it began reeling lower and slowly broke below all the support it had throughout the upper-$0.20 region.
While speaking about XRP’s near-term outlook, one analyst explained that he is expecting it to see a sharp rebound in the near-term due to the strength of the resistance that lies just below its current price level.
“XRP: If you’re bullish XRP, this is probably one of the better places to be so. 3 big tests of resistances, another test would almost certainly break out. Chilling right at support,” he explained.
Image Courtesy of DonAlt. Chart via TradingView.
As seen in the above chart, this support exists between $0.22 and $0.24, which means that bears are now moving to invalidate it.
If broken below, it would suggest that a move to its next key support at $0.19 is imminent.