If the crypto market sentiments weren’t depressing enough, regulatory news and chatter from all around the world are indicating tough times ahead for cryptocurrencies. Bitcoin is taking continuous blows and recovery seems pretty tough. But what caused this situation and how much damage has been done? Let’s find out in the remainder of this article.
The Idea behind Bitcoin
The world’s first and largest cryptocurrency Bitcoin is famous for being the decentralized peer-to-peer network. The idea of not depending on any governing authorities’ networks and not being controlled by any person is why Bitcoin is believed to be perfectly designed for hassle-free payments and money transaction between two people. Bitcoin’s anonymity has attracted the attention of many entrepreneurs and crypto enthusiasts who developed altcoins based on bitcoin’s technology aiming to perfect its functionality. Bitcoin has now spread across the globe and is being used for payments as well as trading another crypto.
Recent Failed Bull Breakout
The failed bullish breakout has Bitcoin prices in deep waters. The decline started on Sunday when bitcoin failingly attempted a comeback. Bulls could only raise the price point to $8,644 USD and since then the market has been tumbling down to approximately $8,240 USD which has currently gone down to $7,300 USD. There are several reasons for which bitcoin markets and cryptocurrency market as a whole is experiencing such extreme bearish trends. Analysts have pointed out that it may have to do with the Chinese ICO markets being highly active and resulting in strict regulatory actions. The Chinese government has officially announced that it deems shady ICOs as great risks and that the government watchdog is keeping a close eye on excessive speculation, fraudulent profit schemes, and fake propaganda.
Reasons Affecting Bitcoin Global Prices
The major reasons that might’ve caused the current bitcoin market condition are; initial Mt Gox sell-off which made bitcoin lose $9,000 USD footing, the recent scandals which shot down Upbit, biggest cryptocurrency exchanges of South Korea and also the recent Bitfinex taxation policy which is under extreme criticism by crypto investors worldwide. Bitcoin markets experienced high losses when the news broke out regarding initial Mt Gox sell-off. The executives who are in charge of refunding users of Mt Gox before its hack apparently sold around 8000 BTC which amounts to be approximately, $70 million USD.
Around the same time, Upbit which is known as one of the most influential crypto exchange located in South Korea was suddenly investigated by Financial Supervisory Commission. FUD spread like wildfire and millions of traders assumed that Upbit which is a subsidiary of communications Influencer Giant ‘Kakao’ might’ve been compromised. After some time, an official announcement came out from Upbit confirming that there haven’t been any raids of any sort and that the motive of FSC, as well as the Korean police force, was an investigation and that the exchange platform remains functional.
The most recent negative sentiments around bitcoin price arise from Bitfinex newly implemented taxation policy. On 17th May, Bitfinex requested some of their users to forfeit their Tax IDs and also their social security number which the government of the British Virgin Island (Bitfinex headquarter) may exchange with tax authorities of the country to which the user belongs. This idea was immediately boo-ed by crypto enthusiasts and influential trading groups such as Whalepool which publicly announced that they’ll stop using Bitfinex unless the taxation policy remains.
Bitcoin Market Position
Even at the current crypto market’s slump, there’s no denying that Bitcoin still holds the place of the biggest cryptocurrency of the world. The individual price has dropped to approximately $7,340 USD. the current position is still miles away from recovery point and analysts say that unless BTC crosses the barrier of $8,500 USD, there won’t be any bullish breakouts. It is still uncertain whether bitcoin prices will manage to recover from the current market trends and reaches the resistance level.
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Should You Still HODL?
Undoubtedly, Bitcoin markets are presently under red zone and there’s no guarantee as to when and how it’ll climb back up towards recovery so that Bitcoin holders may get over the damage. But many traders look at this opportunity to get in the game and hold their Bitcoin in hope for collecting profits in the long run. Like the thumb’s rule of crypto trading goes, ‘buy the dip’ it isn’t that of a bad idea to buy Bitcoin. But one of the many reasons newcomers in the crypto markets are hesitant of buying crypto during a slump is because there’s no telling when the dip will be over. All we can ascertain with trading charts and sentiment analysis is that the market will be rushing towards recovery very soon.
This article was written by Global Coin Report.
This article was originally posted on FX Empire
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