Bitcoin price weekly analysis 28 May: We’re not at the bottom yet
Bitcoin's roller-coaster ride hasn't hit the bottom yet.
- Bitcoin keeps falling, with US$6,700 looking like the next support level.
- Investigations into dodgy crypto dealings look to be having a marked effect.
- US$5,700 is not out of the question as the market looks to still have room to fall.
Bitcoin continues its slide, dropping about US$1,200 over the last week to sit at around US$7,300 at the time of writing. Over the last three or four days, there's been a pattern of relatively small gains of between US$100 and US$300 followed by a similar fall, suggesting there are some buy and sell orders out there that are trying to take some short-term profits.
The last slight increase started about 18 hours ago and another downward fall seems to be on the cards. It looks like the number we're most likely to fall to is in the US$6,700 to US$7,200 zone, which is where BTC has hit before bouncing back.
CCN suggests that we haven't quite bottomed out, and looking at the last few months and what's been happening, I can see their point. While there have been some spectacular jumps over the last few months – like the US$20,000 peak in January and subsequent sojourns over the US$10,000 mark, there have been falls back to the US$6,500 to US$7,000 range. They're suggesting this time that Bitcoin may hit $5,700 before bouncing back.
Trying to find some brightness in all this is pretty hard. NewsBTC says, "If we pull Bitcoin statistics then we see a gloomy situation".
The only silver lining I can see is that if you have been a long-term HODLer, then you're probably still up.
So, what's behind all this bearish activity? Perhaps some players are being spooked by US regulators investigating market manipulation. That might be driving traders into selling as they attempt to move away from established exchanges into other forms of currency movement.
One investor, Mike Novogratz, told Bloomberg "“Weeding out the bad actors is a good thing, not a bad thing for the health of the market. Plenty of exchanges have these inflated volume numbers to create some sense of excitement around coins".
Although it may be coincidental that news of a criminal probe has broken and the prices of many cryptocurrencies have taken a massive hit, it seems to be a bit of stretch. One trader, Sylvain Ribes, alleged that perhaps as much as US$3 billion of all crypto-assets’ volume was "fabricated".
The old Chinese curse about living in interesting times seems to be embodied in the cryptocurrency markets at the moment.
Disclosure: At the time of writing, the author holds BTC, EOS, ETH, ETH, STR, LTC, TRX, BCC, ADA, XRP and GAS.