Bitcoin has once again fallen down below $7,000, confirming the predictions we shared two weeks ago that Bitcoin’s price will see a correction after it hits $8,000, as was hinted by the strong overbought signals on short-term price charts. Fortunately, analysts predict that the price drops will be temporary and strongest in August before the cryptocurrency rises again to reach better value by November or December.
The big price swings of the past month are very likely driven only by speculators, which according to Fortune magazine, now dominate the Bitcoin market. As reported by the online portal of the magazine, Bitcoin is now mainly influenced by price speculations as opposed to criminal activities which once dominated its usage. Confirming this claim is US DEA agent Lilita Infante, who revealed that the use of Bitcoin for illegal activities has fallen down to nearly 10% at present times.
Namely, as DEA’s long-term monitoring of the cryptocurrency reveals, the majority of Bitcoin transactions are nowadays “used for price speculation”. This shift in trends is likely driven by the fact that the agency has amassed all sorts of tools that can help it track illegal blockchain transactions, not only for Bitcoin but also for other cryptocurrencies like Zcash or Monero.
Wall Street to Create New Global Cryptocurrency Ecosystem
In other notable news, Intercontinental Exchange of Wall Street has recently announced that it is planning to form a new company that would help set up a regulated and open global ecosystem for cryptocurrencies. As Forbes reports, the new company will be called Bakkt and it is expected to partner with a number of big corporations, including Microsoft, BCG, and Starbucks, to create a new integrated platform that will make it easier to store, trade, and spend digital currencies and assets.
According to a former Member of the New York Stock Exchange, Christopher Bates, the formation of the company and release of the platform could help alleviate Bitcoin’s notorious market volatility and thus give its usage a boost. Namely, with a company like Bakkt obtaining resources from major companies to create a “federally regulated platform”, new investors would feel more at ease to trade cryptocurrencies, which will subsequently help Bitcoin’s volatility to subside. This, in turn, is expected to create a new “epidemic” for Bitcoin that will drive its price even further, but only if no big problems arise from regulatory bodies, hacks, or major banks.
Bears Are Running the Show
Since our last update, Bitcoin’s price has slid down from a peak of $7,712.77 on Thursday to its lowest point of $6,462.06, which was hit in the morning hours today. The higher trading volume we saw two weeks back has subsided, giving sellers more room to push prices downwards. As of today, the 24-hour volume is at $5.1 billion while Bitcoin’s market capitalization is at $113 billion.
Our technical analysis only mirrors the price direction, with both short-term signals and daily charts showing a strong bearish mood. Out of 12 technical indicators, 7 are in the red zone and sending selling signals while all 12 moving averages also indicate the same trend. Our 5-hour chart shows that Williams, Stochastic and RSI are in the “oversold” zone, so the price could be headed for consolidation. As indicated by the H&S (head and shoulders) pattern on the daily charts, today’s price touches the former neckline and sets the bottom target near to $6,000 this week. Hopefully, the positive news about Wall Street stepping in will help stop Bitcoin’s bleeding to this point and bring bulls back on the scene.