Well, it’s happening: the last week has seen some brutal market action for bitcoin.
Bitcoin broke its long-term support at the $5,700-6,000 zone on Wednesday, plunging abruptly to $5,200. After a brief bounce and period of consolidation around $5,500 over the weekend, it again dropped on Monday to challenge the psychological support at $5k. After some hesitation, this proved no great barrier and the price headed into the $4,500 range (at the time of writing).
The parabolic nature of the run-up last year means there’s little in the way of technical resistance, so it’s impossible to call where the bottom might be. As yet, we have certainly not seen the momentum and volumes that indicate capitulation. Aside from $5,000, we see potential resistance at the $4,500 and $3,500 levels. Will BTC go lower? It’s impossible to tell, of course, but nothing should be discounted. Still, the $3,500 zone should provide some pause if it’s hit.
If BTC has suffered, the alts have fared worse – especially ETH, which has been flippened into second place by XRP. Ethereum has been impacted by the SEC’s recent ruling against two 2017 ICO issuers, entailing fines and the requirement they return funds to investors. This enforcement likely played into the crash across the crypto markets, with traders seeking to frontrun further action against ICO issuers. Meanwhile the BCash hashwars rage on; Wright’s SV chain and Wu/Ver’s ABC are vying for first place, alternating which is ahead. Resources are being expended on this, and it will be a case of who can afford to keep it up the longest. Right now SV looks to be losing, but it’s not over until it’s over.
Whenever the recovery starts, BTC will have tough headwinds to contend with at $6k. This has been tested many times as support, with huge amounts of money. Support traditionally turns into resistance on the way back up, and breaking it will be no small matter: it is likely the most powerful resistance level ever established in the bitcoin market.
It’s not all bad news, thankfully. The Swiss HODL ETP (exchange-traded product) has been approved, meaning that investors will gain access to a basket of five crypto assets on the Swiss stock exchange. And Bakkt is on course for launch early in December, offering an on-ramp for institutional money. The timing of this will be interesting. 12 December is just over three weeks away and that is plenty of time for the market to nosedive to ‘despair’ levels and beyond, offering corporate clients some bargain Christmas prices.
Red hot news, scorching wit and searing opinion pieces from Crypto Inferno.
Join us on