The cryptocurrency market has seen a significant amount of volatility in the past few weeks. Bitcoin and other digital currencies have taken a hit with stocks of major companies getting involved in the market as well.
While there is no telling what will happen next, the current state of the cryptocurrency market is present to show that it’s not easy for the digital currency to be mainstream.
While there are many opinions and criticisms on why cryptocurrencies are struggling, one thing that is clear is that they do not benefit from any regulation or oversight. This is why many investors feel that more regulation may help stabilize cryptocurrencies. Numerous countries have been debating how to regulate cryptocurrencies. In Russia, it was decided to ban them.
However, this ban didn’t completely stop cryptocurrencies from trading on exchanges like Bitcoin and Ethereum did not cease their rise in value since their early 2017 lows. The Russian government has had mixed reactions to banning cryptocurrencies while others believe it will be good for the currency and its legitimacy.
In a market that has already been very volatile, Bitcoin took a huge hit Friday when the Russian government tried to ban cryptocurrency to some extent. As of right now, Bitcoin is likely to continue to fall, possibly towards the $30,000 level. I would not purchase at this point, as you usually get a lot of follow-through after this type of candlestick.
The 50-day EMA appears to be about to break down below the 200-day EMA, which is called the “death cross” but that is normally too late for it to be useful. In light of that, it is not so much that we need to break down to the $30,000 level as it is that it is more likely to occur. That being said, if we can wipe out the candlestick from the Friday session, it could be very bullish for the market. As with anything else risky, crypto continues to face downward pressure, so it is not surprising that Bitcoin finally caved in to the pressure considering other instances, like the NASDAQ.
Bitcoin needs to turn around before anyone in crypto can make money. Bitcoin continues to rule the roost, and everything else falls in line. As with Bitcoin in general, Ethereum certainly took a hit as well. Since we need several days of stability, I believe what will most likely happen for longer-term traders will be sideways movement, a bounce, and then more risk taking by multiple markets, not just this one. At this point, don’t try to be a hero; picking up Bitcoin will take a great deal of patience.
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