Bitcoin price weekly analysis 11 June: Boom, crash, bitcoin
There were big losses for bitcoin this week as the market takes a pounding today.
- Bitcoin suffers big losses as the market suffers a couple of big dips.
- Regulators are looking into market manipulation, potentially making traders anxious.
- An uncertain period is ahead of us, but whether bitcoin has bottomed out is not easy to predict.
Bitcoin has lost over 10% in the last seven days. In fact, every coin in the top ten has suffered big losses. And while bitcoin's 10% dip wasn't as severe as the dips suffered by Cardano, IOTA, EOS and TRON, which all dropped by around 20%, it seems the market is heading for another overall dip after some optimism last week.
Until Sunday, things looked pretty steady but two big red candles, the first on Sunday morning and the second earlier today, stripped close to US$1000 from bitcoin's price to bring it down to around US$6800. While things seem steady at the moment, it's hard to know whether things will hold around the US$6700 mark for a while or whether the market will light another red candle. If the pattern of the last 40 hours or so it to be repeated, we could see BTC get close to US$6200 – something we haven't seen since late October and early November 2017.
Trading volumes have been reasonably steady, despite the massive falls, with 24-hour trading volume levels sitting between US$4.5 billion and US$5 billion. Interestingly, as the price has sat steady for the last 16 hours, volumes are up to US$5.75 billion over a 24-hour period, suggesting there are some buyers out there trying to buy at the bottom.
But whether this is the bottom or another step along the way is the big question.
If we trace the price over the last six months and draw a trend line down from the peak prices and another across the base, we see a triangle forming that has an apex at around US$6700, which is where we are now. Ethereum World News says that the 100-day simple moving average (SMA) is lower than the 200-day SMA, suggesting there's still some room for the price to fall. They add that the recent drop may be due to a loss of confidence by some parts of the market following a South Korean exchange hack. Bitcoin was not among the coins that were affected but traders may be anxious.
An investigation into market manipulation involving bitcoin futures is also starting and exchanges, including Coinbase, Kraken, Bitstamp and itBit, have been asked to provide information to investigators. NewsBTC is saying a push to drive the price down to US$4500 may be in progress.
The question traders and analysts will be asking is whether we have hit the bottom or whether the market will recover. There are plenty of people out there saying the bearish dip we're in is temporary, but I'm not seeing anyone make any predictions about when someone will release a bull or what circumstances will change the market's direction.
Between various investigations, and the increasing interest and oversight coming from regulators as well as the accumulated anxiety of various market hacks that have seen traders lose their money and a market with more coins and ICOs than can be sustained, it's clear we're in a period of change. One might say the cryptocurrency world has moved from childhood and is now entering puberty and suffering some growing pains and awkwardness.
Whether cryptocurrency grows to be a mature adult or a delinquent is the big question.
Disclosure: At the time of writing, the author holds BTC, EOS, ETH, ETH, STR, LTC, TRX, BCC, ADA, XRP and GAS.