Almost 6% fall breached the and brought BTCUSD price to the main 5750 – 6250, the last barrier before renewing yearly lows. The clear reasons for the fall are currently unknown, many blame such dropdowns on the trading robots. It is also known, that there were two negative publications, that could have had an impact on the price: International Monetary Fund (IMF) published a negative report, basically stating that blockchain boom facilitating the “rapid growth” of cryptocurrency assets could create “new vulnerabilities in the international financial system”; Juniper Research published “The Future of Cryptocurrency” report, which states that the market is at the brink of disaster. For now, the downward risk is high. The bulls will probably buy the 6000 level, but it is unclear if they will manage to move the price high enough to stop the falling. We recommend staying out of the market today and watch if the price will manage to go flat above 6250.
Today most probable trading diapason: 6000 - 6450. High downward risk.
- IMF: cryptocurrency growth makes the world economy vulnerable
Cryptocurrencies can create “new vulnerabilities” in the global financial system. This is stated in the October report of the World Economic Outlook by the International Monetary Fund (IMF).
Violations of cybersecurity and cyber-attacks on critical points of the financial infrastructure represent an additional source of risk because they can disrupt the functioning of the cross-border payment system and the flow of goods and services.
The report also notes that digital assets will become a threat to the economy if their distribution continues at a rapid pace.
Also, the head of the IMF Christine Lagarde said that the rapid evolution of the financial system requires more vigilance on the part of regulators.
Note that in May, IMF expressed a completely different point of view. At the time the International Monetary Fund was stating that cryptocurrencies do not constitute a threat to global economic stability.
- Juniper Research: cryptocurrency industry on the verge of collapse
Juniper Research has published a study “The Future of Cryptocurrency: Bitcoin & Altcoin Trends & Challenges 2018-2023” which states that the digital asset market is on the verge of a disaster. Some abstracts from the research were quoted by Bloomberg.
The authors of the material indicate that the average daily transaction of the first cryptocurrency decreased from 360 thousand at the end of 2017 to 230 thousand in September 2018. At the same time, the total dollar amount of the value transferred in the Bitcoin blockchain for this period decreased from $ 3.7 billion to $ 670 million.
At the same time, analysts note that in the first quarter, funds worth more than $ 1.4 trillion were transferred through cryptocurrency transactions. At the same time last year, this value was less than $ 1.7 trillion. However, in the second quarter of this year, this figure fell by 75%, and the market capitalization reached marks below $ 355 billion. At present, the total value of digital assets represented in the market is $ 216 billion.
“Based on the activity observed during the first half of the third quarter, Juniper predicts a 47% reduction in the of transactions for the end of this period,” the researchers note.
In addition, Juniper Research analysts stated that cryptocurrencies did not prove to be an alternative to the global financial system in the context of the growing trade confrontation between China and the US, as well as Brexit-related problems.