Bitcoin Tumbles By 5% To $6,900
Following a week of positive price action, the cryptocurrency market has finally seen a pullback, with a majority of crypto assets falling by 5% or more. As reported by Ethereum World News just hours ago, on Wednesday morning, trader awoke to a worrisome sight, with Bitcoin (BTC) falling to just a smidge above $7,000.
Although many thought that the move $7,000 was already a bad sign, as the day continued, the market conditions worsened, with altcoins and BTC seeing further moves to the downside as the selling pressure unfortunately continued.
At the time of writing, BTC is currently at $6,950 and is down 5.2% on the day. Altcoins, however, had it much worse, with Ethereum, Bitcoin Cash, Cardano, Tron and more posting 12% losses or more. Altcoins tumbled so far that BTC dominance rose by nearly 2% in just a few hours, moving from 52.9% to 54.8% at the time of writing. Some reasoned that due to the fact Bitcoin fell below $7,000 that a continued downtrend could be in store for the foremost crypto asset, which will likely drag the rest of the market down with it.
Two traders recently appeared on CNBC “Futures Now” to discuss the current market climate, highlighting where they expect Bitcoin (and subsequently, other crypto assets) to head next.
All the major indices poised to open lower this morning as crude falls and #bitcoin futures drop below $7K pic.twitter.com/SzdCGscuEP
— CNBC Futures Now (@CNBCFuturesNow) September 5, 2018
Trader Jeff Kilburg first brought up the idea of Goldman’s move to set aside its plans to open a crypto trading desk. Explaining what this means for the industry, the CNBC trader stated:
“We are very cautiously trading this decline and yes, this is a reaction to headline risk. We’ve talked about all the (regulatory) uncertainty and the fact that Goldman is considering scraping that cryptocurrency desk that they’ve talked about starting up hit cryptocurrency prices across the board. This decision underscores and illuminates the fact that we don’t have enough certainty…”
The analyst added that despite the bearish Goldman news, the longer-term trend of Bitcoin is still pointing upwards. On the other hand, however, the other CNBC guest explained why the short-term market cycle could be pointing towards a further move lower. Anthony Grisanti noted:
“[Goldman’s move] is the first roadblock in a road of many. I’m not surprised that Goldman Sachs maybe announced that it [will not open a trading desk] , only because there isn’t enough volume in the Bitcoin futures for them to put out [crypto] positions and hold those… I’m trading this on the short side, $6,740 is the next support and I’m looking for this to trade down to that level.”
For now, it seems that Bitcoin is taking a stand above the $6,740-$6,800 line of support, which many technicians see as an important line of support/resistance. So it doesn’t seem that a further move lower will happen today.
$5,000 Could Be Bitcoin’s Next Stop
It seems that analysts across the board seem to be more bearish than bullish, with Bloomberg’s “Charting Futures” segment doing its best to highlight where Bitcoin could be headed next. The host of the show first brought up the idea of the correlation between the U.S. dollar index and Bitcoin, adding that as the dollar moves relatively higher, BTC moves lower (and vice-versa). So taking into account that the U.S. dollar index is trending higher may indicate that BTC could be in for a rough ride.
Closing off the crypto-related portion on this show, the host brought on a guest to discuss a mid-term prediction for the price action of BTC specifically. The analyst first revealed that Bitcoin’s move from $5,800 to $7,400 was just a bear market rally, while also advising traders to sell the top to secure profits. He also noted that crypto markets are becoming less prone to short squeezes, which may indicate that bears still have a stronghold over the price action of this asset class.