Currently the most striking news, and worrying, is the fall in joint of many of the large virtual currencies, such as ETH or EOS, but the most shocking is BTC, which fell below its security of US $ 8000. This post seeks to explain the causes and their implications.
Causes
To explain the causes, we will cite the report made by CCN, which summarizes it in 3 factors:
As previously reported by CCN, the recent correction of the cryptocurrency market can be attributed to three main factors: The liquidation of Mt. Gox in early May, the Bitfinex tax policy and the scandal involving Korea's two largest cryptocurrency exchanges. of the South, Upbit and Bithumb.
These three factors led investors to lose confidence in the cryptocurrency market in the short term. By targeting a small portion of its user base to lose tax IDs and personal identification, Bitfinex led large-scale investors to fear possible government intervention and withdrew large sums of funds from the exchange.
In South Korea, due to the controversy surrounding Upbit and Bithumb, local investors have been puzzled, not knowing whether the local crypto market can be trusted or not.
Despite the dramatic improvement in infrastructure criptomonedas industry and the entry of major financial institutions, the downward trend too strong of BTC and other important criptomonedas have prevented the market recovers and initiate a corrective rebound.
It is likely that, in the short term, the BTC price will fall to the lower end of US $ 7,000, as suggested by cryptocurrency researcher Willy Woo on May 22.
"Quite sure that US $ 8,000 of support in BTCUSD will fail. Next support, US $ 7,000 (although that could also fail). So, I'm waiting for another dead kitten to take us to the period from July to September, when BTC fully unwinds from the hobby phase and is ready for an accumulation phase, "Woo said.
The Relative Strength Index (RSI) of Bitcoin has already begun to show oversold conditions, which would normally result in a strong rebound for BTC. But, due to the strong downward trend in the Bitcoin price, it is likely that the low Bitcoin RSI will be discarded, and the bears will continue to push the price to the lower end of US $ 7,000.
Bitcoin has successfully minimized its downward trend in the US $ 7,700 mark, recording a slight rebound back to US $ 7,850. However, if the price of Bitcoin falls below US $ 7,700, it is likely that the price of BTC will stabilize in the region of US $ 7,300 in the short term.
Implications
It can be seen that they place enough emphasis on BTC falling below US $ 8,000, the reason for this is that, at the time of fluctuation at the beginning of this year, analysts constantly argued that the stability of the currency depended on this restriction. as base.
As it broke, analysts fear the stability of the currency, some stating that they prefer to wait for the currency to return to US $ 8,000 before issuing any judgment.
Although other reporters, such as CBNC, suggest that the situation is stabilizing, explaining that investor confidence is returning with the platforms that are innovating.