Bitcoin, boss of all cryptos, dropped below $4,000 and stretched its 2018 crash, bringing its decline from last December’s record high of almost $20,000 to about 80 percent.
Analysts, now consider the biggest cryptocurrency’s worst bear markets as the virtual currency slid to reach approximately $3,500 on Monday.
Various reports indicated investors have avoided bitcoin, due to regulatory misconstruction and unhappy investors occurring from an undeveloped market infrastructure and unexpected frequent swings in price.
Analysts said the U.S. Securities and Exchange Commission was somewhat to blame for the recent sell-off, with the delay in its approval of new bitcoin instruments, as well as for its investigations of initial coin offerings and crypto exchanges, boosting even more uncertainty and resentment.
Along with the pre mentioned, came the news that the SEC has enforced fines against Airfox and Paragon Coin that sold cryptos considered securities in initial coin offerings.
The companies have complied to give back funds to the involved investors, and list the tokens as securities, pay penalties, and communicate with the commission for further guidance on such activities.
On other news, Nasdaq Inc. is taking action in order to list Bitcoin futures, with intense interest expected regardless of the cryptocurrency’s dramatic dive during the past year.
The Nasdaq futures will be based off the Bitcoin’s price on numerous spot exchanges, as compiled by VanEck Associates Corp., the person said.
CME uses prices from four markets, while it’s just one at Cboe.
Along with Nasdaq, New York Stock Exchange owner Intercontinental Exchange Inc. said last week it will launch its own contracts on January the 24th.
Goldman Sachs Head Crypto Trader Justin Schmidt and SEC chairman Jay Clayton had some interesting reaction to various questions they were asked.
Justin Schmidt who was hired by GS to lead the firm on digital assets, said that from a regulatory perspective, they were limited in terms of what they could offer to clients, but also made a reference to clients interested in crypto price shifts and how to safeguard these assets.
On the other hand, SECs Jay Clayton was asked whether bitcoin is regarded as a currency or a security.
He replied very boldly that bitcoin was created to replace sovereign currencies, and that its characteristics don’t apply to a security, reaffirming the SECs opinion on the digital coins.
In addition, Bitcoins downfall may persist, for the time being.
Despite its attempt to replace real currencies, bitcoin has no intrinsic value someone can roughly calculate, which creates some uncertainty.
Also, unlike precious metals like gold, bitcoin cannot be used as a store of value neither as an, industrial metal or a component of jewelry.
However, a reduction of its value could bring measures and major changes in the crypto world, and may then resurrect the digital coin to real worth and wide adoption.
|Support:||4100 (S1), 3550 (S2), 3000 (S3)|
|Resistance:||4500 (R1), 4930 (R2), 5335 (R3)|
Technically as Bitcoin has made a comeback, inching higher yesterday and stabilizing, we lift our bearish bias for a sideways movement.
Arguments for such a case are strengthened as Bitcoin’s recent price action broke the downward trendline incepted since the 14th of October.
If the upward movement is to continue we may see the digital asset move towards the 4500 (R1) resistance level and aim even higher for the 4930 (R2) resistance barrier.
On the contrary, a bearish market could force bitcoin to break our 4100 (S1) support line and move lower for the (S2) 3550 support barrier.