Low volumes and weak support lead to a very unclear picture.
This week, we’ll take a look at two opposing views of the market, each of which make good sense and that have each gained some traction on the web and among traders. Note that although they paint very different scenarios — basically one bullish and one bearish — that doesn’t mean one of them is wrong. The market is a bit like Schrodinger’s Cat: all different scenarios exist at once, with varying degrees of probability, and the endpoint only becoming clear when it actually happens. Uncertainty is inherent in the nature of the market, and even the act of observing it can change its state.
But enough of the philosophy. Let’s get down to business.
This article by CryptoMedication pretty convincingly makes the case that bitcoin is worth at least $6,000: https://medium.com/thedailydose/crypto-market-analysis-of-the-massive-sell-off-on-june-9th-and-10th-pt-1-chart-analysis-8bbd537447b. The article analyses the heavy fall back to $6,100 that occurred two weeks ago, dropping through multiple well-established support levels. We’re currently sat in the ‘last line of defence’ zone: an area of very strong support that has been tested many times. If price falls below that, it marks a change in the psychological paradigm of bitcoin hodlers, and of market buyers. But right now, the fact that price has failed to breach this level says that the market as a whole views $6,000 as a good price for a bitcoin.
The same author has also hinted at scenarios where falls back to $4,500–5,000 could occur, which is an idea that is also gaining traction from other analysts: https://bitcoinmagazine.com/articles/bitcoin-price-analysis-shaky-support-gives-way-massive-bear-flag-set-/#1529615520. The ‘TL;DR’ of this one is that the recent fall and stabilisation paints a big ‘bear flag’: a brief respite that will be followed by another leg down. In this instance, the writer is looking at a final resting place in the mid-$4,000s. Right now, bitcoin has found support, but it’s shaky.
A few bits of news that have some relevance this week:
Korean exchange Bithumb experienced a $30 million hack, stating: ‘We checked that some of cryptocurrencies valued about $30,000,000 was stolen. Those stolen cryptocurrencies will be covered from Bithumb and all of assets are being transferring to cold wallet.’ (Guys, will you never learn?) See https://www.coindesk.com/bithumb-exchanges-31-million-hack-know-dont-know/.
The Bank of International Settlements (BIS), which is basically the central bank for the world’s central banks, has warned about cryptocurrencies — again. With the air of a man coming back to an old argument with the phrase, ‘And another thing!’, BIS has warned that crypto could break the internet, amongst other things. See https://www.smh.com.au/business/markets/bitcoin-could-break-the-internet-warns-the-bis-20180618-p4zm2l.html.
And Tether has released a report on its reserves, which has met with widespread dismissal — not because people believe the reserves aren’t there, but because it wasn’t a full audit and it wasn’t carried out by a proper auditor. In short, the continuing lack of transparency raises more questions than it answers. See https://www.reddit.com/r/BitcoinMarkets/comments/8sid45/tether_transparency_report/.
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