Uncertainty is spreading
The leading crypto currency has been moving in a range between USD 9000 and USD 10000 for weeks. After briefly crossing the magic line, the cops failed a dozen times with new attacks. Due to the high correlation to the traditional markets, there are now even several indicators that speak for a violent crash. We take a look at the current market situation.
Bitcoin falls below important trend line
The trend line at USD 9200 presented itself as a reliable support for the market leader several times in the past few days. Here several attacks by the bears failed and the bulls got a stable base. But now the support area seems to be falling. At the time of writing, the BTC is trading at a price of USD 9155. The trading volume of about USD 15 billion illustrates the seriousness of the situation. There is a lack of purchasing power among investors.
Investors show restraint
The so-called “Witches’ Sabbath” ended with heavy losses for the traditional markets. The Dow Jones Industrial Average and the S&P 500, for example, initially closed the year with losses of around 2.5 %. Traders refer to the third Friday of the third month in a quarter on which futures options expire as the “covenant”. Often a high volatility can be seen on these dates. This is a characteristic for which crypto-space has become generally known. However, the Bitcoin price seems to have been consolidating rigidly for several weeks. Before the halving, this situation was only expected by very few traders.
Beware of sudden price eruptions
The current sideways movement seems to be directly related to the traditional markets. In an article by cointelegraph.com it is also stated that all markets are moving cautiously, Bitcoin is no exception. And here lies the big crux of the matter: For years, experts have attested to Bitcoin’s exceptional position as a crisis-resistant “Store of Value”. The low inflation rate, the limited availability and barrier-free transactions speak for such a special item. But there is a lack of capital!
Bitcoin must grow in order to isolate itself
A total market capitalization of approximately USD 261 billion is too low to sustainably distance itself from the major stock markets. In many states of the USA, the number of new corona infections has increased and the fear of a second world is making itself felt on the trading floors. Moreover, many investors have not yet digested the Fed’s gloomy forecasts. A PayPal integration could take the Bitcoin adaptation to a new level. However, these are still only unconfirmed statements without any guarantee.
Where are the coming limits?
After the support at USD 9200 was broken, investors are now focusing on the USD 9000 mark. From a bullish perspective, the coming resistance levels are USD 9200 and USD 9400.