Bitcoin Price Spiked 11% in February But Could Tank & Hit New Lows

Bitcoin Price Spiked 11% in February But Could Tank & Hit New Lows 1  PASSIVE INCOME IDEAS BITCOIN AND BLOCKCHAIN

Bitcoin Price Spiked 11% in February But Could Tank & Hit New Lows

The bitcoin price posted its first monthly gain in February after a dismal seven-month drought. However, technical analysis suggests the original cryptocurrency could crater to new lows because a downtrend appears to be forming.

Bitcoin Price Spiked 11% In February

Mati Greenspan is a senior market analyst at Tel Aviv-based crypto trading platform eToro. He told Bloomberg that February’s 11% spike in the bitcoin price is encouraging, but it isn’t out of the woods yet. Greenspan noted that trading volume has rocketed to a 12-month high.

After six months in the red, it’s great to finally close one in the green. What I’ve been watching lately are the number of transactions on the bitcoin blockchain and the total volumes across crypto exchanges — both of which are holding at their highest levels in more than a year.

Even though we’re still officially in a bear market, there is plenty of cause for optimism.

However, Greenspan noted that bitcoin’s failure to stay above $4,000 is part of a longer-term downtrend that’s materializing.

Bitcoin’s six-month price chart is sobering. | Source: WorldCoinIndex

Technical Analysis Not Always Accurate

As of this writing, bitcoin’s technical chart is somewhat bullish because its RSI (relative strength index) is hovering at 36.

An RSI of 30 indicates that an asset is oversold, which is a bullish indicator. RSIs of 20 and 80 are typically used as oversold and overbought signals, respectively.

While some stock traders swear by technical analysis, it’s not always an accurate predictor of market movements. As CCN reported, a Fundstrat analyst predicted in June 2018 that the bitcoin price was just days away from a major breakout.

At the time, Robert Sluymer — the head of technical strategy at Fundstrat Global Advisors — said he was confident that bitcoin would spike because the charts suggested so. He also noted that bitcoin was oversold at the time, with a relative strength index that had topped 40.

“I think the markets always respond to technical analysis,” Sluymer said in June. However, that rally never happened.

DOJ: Crypto Markets Are Manipulated

Of course, there are many unforeseen factors that account for bitcoin’s erratic price movements. One is market manipulation.

In September 2018, the New York Attorney General’s Office released a report concluding that some crypto exchanges can easily be manipulated because they lack sufficient consumer protections, are riddled with conflicts of interest and don’t have safeguards to prevent abusive trading.

“Platforms lack robust real-time and historical market surveillance capabilities — like those found in traditional trading venues — to identify and stop suspicious trading patterns,” the report said.

In November 2018, the US Department of Justice launched a criminal investigation into whether the crypto market’s spectacular 2017 bull run was manipulated.

Push to Legitimize Crypto is Underway

In December 2018, two US congressmen introduced bipartisan legislation designed to prevent bitcoin price manipulation and to position the U.S. as a leader in the crypto industry.

At the time, Congressmen Darren Soto (Democrat-New Jersey) and Ted Budd (Republican-North Carolina) urged fellow lawmakers to embrace crypto and blockchain, saying the United States must not ignore its “profound potential” to boost the economy.

“Virtual currencies and the underlying blockchain technology has a profound potential to be a driver of economic growth. That’s why we must ensure that the United States is at the forefront.”

Market observers say mainstream crypto adoption hinges on regulatory clarity to legitimize the market and rid it of the scam artists that give the entire space a bad name.

Source link

Related posts