Bitcoin fell from $8,500 on Monday to below $7,300 recently, even lower on some exchanges, such as Bitfinex. The initial drop was extremely quick, signaling it could have been one individual or group selling off a large chunk of BTC. There have been two subsequent quick changes in the past 24 hours, but with lesser effect on the price.
RSI is showing oversold. The price has fallen to and bounced along the 61.8 percent Fibonacci retracement, meaning the bearish trend has been strong, but this is also a point that generally signals a reversal. Similarly, the buy markets percentage has dropped to 8%. Anything below 10% is considered to signal a reversal. The most recent reversal using this metric came at 4% in March.
The 5-day and 10-day Moving Averages show the strong bearish pattern from May. The RSI is holding between 50 and 30, which isn’t too strongly an indicator of one way or the other.
A successful close above the trend line and $7,700 may perhaps open the doors for more gains.
Bitcoin price is showing positive signs above $7,400 against the US Dollar. BTC/USD must break the $7,650 and $7,700 resistance levels to recover further.
It’s hard to imagine Bitcoin without these kinds of drops at this point. The drama continues to raise public interest. The U.S. government has launched an investigation into price manipulation on cryptocurrencies like Bitcoin and Ethereum. While this isn’t the best news, it’s better than nothing being done.
It also doesn’t stop the positive changes from happening as well. A German Exchange recently said they are interested in adding BTC products and Paypal CFO says they will support BTC in the future.
Price Manipulation Investigation
The investigation is focused on practices that can influence prices such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling. Federal prosecutors are working with the Commodity Futures Trading Commission. These tactics are studied at the University level as well.
John Griffin, University of Texas finance professor studied manipulation specifically in digital-coin markets commented to Bloomberg: “There’s very little monitoring of manipulative trading, spoofing and wash trading. It would be easy to spoof this market.”
By: BGN Editorial Staff