The International Monetary Fund (IMF) downgraded the world economic growth outlook, by spurring risk-off trading across the globe. This pushed Bitcoin to a high of $6,656, but the price retraced fast as the move wasn’t supported by volume. What this means is that any breakout, upwards or downwards, should have healthy volume behind it. Only this can assure that the price continues its move further. If the volume isn’t there, it is more than likely that the breakout is short-lived.
What contained the bitcoin rally is that speculators failed to see that the IMF has also raised concerns about the cryptocurrency space. This was clearly stated in the IMF’s World Outlook Report: “Cybersecurity breaches and cyber-attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”As it has been the case recently, Bitcoin’s upward momentum is lacking one critical element; participation from the wider community. Remember, last year’s move towards $20K was supported by the retail client. It was the masses going crazy about the cryptocurrency thinking that buying bitcoin is the shortcut to acquire the Lambo they always wanted.
No matter which exchange you look at, there is one common theme; no volume. A lot of questions are being raised in regards to the opening of new accounts at various different exchanges and the key problem continues to be the lack of a reliable third-party auditor.Bitcoin needs some sort of a blessing to revitalise the rally. This could come in the form of an ETF approval from the U.S. Securities Exchange Commission (SEC). To date, the SEC has rejected nearly nine applications in this space. But there is still hope. The department has invited parties and public people to share their views on bitcoin ETFs. The date set for this is October 26th, 2018.
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