Bitcoin’s struggle continues this week as the cryptocurrency fails to break away from correction and repeat the growing streak that took it to an all-time high of $20,000 last December. After rising to $12,000, Bitcoin started sliding at the beginning of the week and dropped again below $10,000. And judging from the current market stats, the struggle might not be over yet.
The downtrend has been linked to a number of negative reports, one of which was the slapping of a subpoena on the Bitfinex exchange and the Tether Company by the U.S. CFTC (Commodity Futures Trading Commission). The news was first picked up by Bloomberg Technology, which cited an anonymous source for the information.
Bitfinex, one of the biggest Bitcoin exchanges by trading volume, reportedly shares a CEO with the Tether Company which issues the popular Tether cryptocurrency that is pegged to the dollar and allegedly backed up by real USD reserves. However, with a subpoena coming in and suspicion rising about whether Tether has a real reserve backing their cryptocurrency, fears of price crashes have been voiced as Tether is considered to be directly linked to Bitcoin’s recent price growths.
Buying Mood Forming on the Market
Since our update last week, Bitcoin managed to pick up steam over the weekend, only to start dropping again from Monday onwards. The highest the price climbed was on Sunday morning when Bitcoin hit $12,040.30, while the lowest price point happened in the early morning hours today when the price dropped briefly to $9,777.42.
Our chart statistics show that the trading volume remained subdued during this week also, after nearly halving during the previous week. As of now, the trading volume is at $10 billion, while the market cap sits at $172.7 billion.
Even though the market has remained predominantly bearish during the past 24 hours, our technical analysis shows that buyers are returning on the scene. Namely, short-term charts indicate the trends are evening out, with 6 out of 12 oscillators and 5 out of 12 moving averages sending a buying signal. However, the long-term SMA 100 has dropped below the SMA 200, showing that there is less resistance to be found on the downward course.
Judging from the current signals, the price will wait for the next week’s direction to be determined by a stronger market mood. If sellers prevail, we might be looking at a drop towards the $9,000 range.
Facebook Bans Ads for Cryptocurrency and ICOs
Another news update that came this week is Facebook’s decision to ban all advertisements related to “misleading or deceptive promotional practices”. Among the products incorporated under the new ban are ads about investing in cryptocurrencies and Initial Coin Offerings (ICOs).
As reported by the Verge, the new decision was shared in a blog post by Rob Leathern, Product Management Director of Facebook, who said that the ban might not be permanent as the company might “revisit the rules” once it gets “better at detecting and removing bad ads”.
According to Leathern, Facebook is intentionally adopting a broad policy since it will protect their users while the team works on figuring out a better way to detect deceptive advertising practices. Their belief is that many companies working with cryptocurrencies, ICOs, and Binary Options “are not currently operating in good faith”, which is why they will be enforcing the ban and revisit it when their “signals improve”. Some examples given for ads breaching the new policy are calls to invest like “Use your retirement funds to buy Bitcoin!” or “New ICO! Buy tokens at a 15% discount NOW!”.