What was to be a promising month for Bitcoin quickly turned into a month of unpredictable volatility that once again shook up trust in BTC from traditional asset investors and financial institutions. Prompted by the immense effect on Chinese regulatory politics on the price of Bitcoins, the financial world has once again set all eyes on Bitcoin’s instability, questioning its long term success.
But the truth is Bitcoin has never been truly accepted by traditional experts and institutions. Bitcoins were always a financial system for those seeking not to only avoid exposure, but also avoid sanctions imposed by regulated markets. And while this unrestricted freedom may have had its bad uses, it has also been used for a greater good, like with WikiLeaks, whose founder still makes use of the cryptocurrency.
Thus, whether banks and governments struggle to accept it will likely play a minor role in its perseverance, since it will always find a use, whether as a financial means or technological improvement. But of course, the path to success is bound to be filled with obstacles, as it was thus far.
Bears Hold Bitcoin Market
After taking a plunge on Wednesday, the price of Bitcoin had a short recovery that took it a tad upwards but not enough to cover the drastic distance it went. Its biggest point was that same day when the price hit its weekly peak of $906.71 only to start falling down uncontrolled to $766.33 by the end of the day.
Looking at the volume charts, it’s not surprising why the price went down so quickly, as the market volume tripled in size as soon as news of PBOC regulations spread out. Currently, it’s back at normal levels, or $182,613,000 – a number not high enough for any major price boosts. The market cap, on the other hand, is at $12.6 billion.
Our market analysis shows that the market is currently run by sellers, with all 12 moving averages and 9 out of 12 technical oscillators sending a selling signal. However, the Williams %R is already in the oversold zone and the gap between the long-term SMA 100 and 200 is at a safe size, which hints that bull pressure might be picking up.
From the current stance, the price looks headed for further tests of the $770-785 range, while hopes of bigger price upticks are currently small. Due to the unpredictability of external factors, it’s best to keep a close eye for any new events, for now.
PBOC Send Market Crashing, Again
Just when panic started subduing and news spread of no new regulations from Chinese authorities, the PBOC (People’s Bank of China) took another step on Wednesday that sent the market into panic mode and crashed the price, again. Namely, as reported by Reuters, what the PBOC did was to announce the launch of investigations into Shangai and Beijing exchanges as part of their plan to ward off market risks.
The investigations officially began PBOC’s pre-announced plan to inspect Bitcoin money laundering and market manipulations, among other things, and targeted a number of high-profile exchanges, including OKCoin, BTC China, and Huobi. And as soon as the news hit, the price took a nose dive, resulting in a $138 price drop in a single day.
The interesting thing here was that, even though news of investigations appeared a day earlier it wasn’t until the official start that the price went crashing. As hard as it is to admit, events like this only give credibility to theories that China is the key player in the world of Bitcoins.