The total market capitalization of cryptocurrencies has plunged by as much as 23% from the highs of $89.9bn on Monday. The declines happened amid news that Google (NASDAQ:GOOGL) will follow Facebook (NASDAQ:FB) and ban cryptocurrency and ICO advertisements on its applications. The Google ban will come into effect in June of this year. It is also understood that Bitcoin prices have come under pressure, as a trustee of the now-defunct exchange Mt.Gox has been selling large amounts of bitcointo pay back creditors. Bitcoin has dropped to a price of around $8000, where it is at the break-even cost of mining. This may encourage some miners to turn off machines until the price recovers.
Bitcoin
On the daily chart, bitcoin continues to play out the double top pattern identified in our previous report. The measured target is at 7,300, near the 78.6% Fibonacci retracement. Furthermore, BTC/USD is now trading below the 200MA. Immediate support is at 7,650 and a break will open the way to further declines towards the February lows of 6,000. To the upside, a reversal and break of 8,400 is needed to change the outlook, with major resistance at the 200MA and then 9,500. A move above the falling resistance trend line will be required for the picture to turn bullish.
Google (NASDAQ:GOOGL) and the U.S. SEC are largely behind this trend, with the former disclosing its intention to ban all ICO and cryptocurrency-related advertising, starting this coming June. The SEC, on the other hand, has been sending subpoenas to crypto exchanges and cryptocurrency hedge funds in effort to ensure that firms are valuing holdings appropriately and keeping client assets secure.
In the latest U.S. Congress hearing on ICO and cryptocurrencies, the participants were divided into a group of two, with the first one insisting on introducing strict regulation at once, while the second suggested they first gain more knowledge on the subject before adopting a regulatory approach. In all, it seems that a market that was created as an alternative to the current financial system is now under pressure from the authorities and has become dependant on U.S. Government decisions.
Even though prices are falling, the volume has been building up the last 10 days and this a very healthy sign for the market.
My support zone is in between $6600 and $7500, and not a bad place for longer term buy orders to be placed. Perhaps a few below 6k for luck.
This could all change quickly in my opinion, should prices consolidate above 8100 today, we might see prices push higher.
Worst case scenario would be a fall through the $6600 support level, this will send prices to 6k and if that fails we will retest the bottom of the downtrend channel.
Being a technical trader it helps to be mindful of the fundamentals, when I take into consideration there is some bearish news, it is greatly overpowered by all the bullish developments in the crypto space.
The buyers are out there (some battered and burnt), open interested is building, lets be patient and wait for the price action to lead the way.
Bitcoin
On the daily chart, bitcoin continues to play out the double top pattern identified in our previous report. The measured target is at 7,300, near the 78.6% Fibonacci retracement. Furthermore, BTC/USD is now trading below the 200MA. Immediate support is at 7,650 and a break will open the way to further declines towards the February lows of 6,000. To the upside, a reversal and break of 8,400 is needed to change the outlook, with major resistance at the 200MA and then 9,500. A move above the falling resistance trend line will be required for the picture to turn bullish.
Google (NASDAQ:GOOGL) and the U.S. SEC are largely behind this trend, with the former disclosing its intention to ban all ICO and cryptocurrency-related advertising, starting this coming June. The SEC, on the other hand, has been sending subpoenas to crypto exchanges and cryptocurrency hedge funds in effort to ensure that firms are valuing holdings appropriately and keeping client assets secure.
In the latest U.S. Congress hearing on ICO and cryptocurrencies, the participants were divided into a group of two, with the first one insisting on introducing strict regulation at once, while the second suggested they first gain more knowledge on the subject before adopting a regulatory approach. In all, it seems that a market that was created as an alternative to the current financial system is now under pressure from the authorities and has become dependant on U.S. Government decisions.
Even though prices are falling, the volume has been building up the last 10 days and this a very healthy sign for the market.
My support zone is in between $6600 and $7500, and not a bad place for longer term buy orders to be placed. Perhaps a few below 6k for luck.
This could all change quickly in my opinion, should prices consolidate above 8100 today, we might see prices push higher.
Worst case scenario would be a fall through the $6600 support level, this will send prices to 6k and if that fails we will retest the bottom of the downtrend channel.
Being a technical trader it helps to be mindful of the fundamentals, when I take into consideration there is some bearish news, it is greatly overpowered by all the bullish developments in the crypto space.
The buyers are out there (some battered and burnt), open interested is building, lets be patient and wait for the price action to lead the way.