Bitcoin just had one of the most difficult weeks in the past year as its trading price started crashing on Tuesday and reverted back to December levels. As could be expected, other top cryptocurrencies quickly followed suit and likewise started to exhibit significant loses ranging from 27% to even 40% in the course of 24 hours. Ethereum, Ripple, and Bitcoin Cash all lost yesterday and are still to recover along with Bitcoin.
The main culprit for the cryptocurrency slide was news of new regulatory restrictions in the Asian markets, particularly South Korea and China. Reportedly, South Korea’s Finance Minister, Kim Dong-yeon, revealed in an interview on Japan’s TBS Radio that South Korea is still considering shutting down cryptocurrency exchanges. On the other hand, Chinese authorities have pushed their clampdown further and are now targeting offshore exchanges and exchange-like service platforms, according to reports.
While South Korea’s plans are still far from realization, the news still instilled panic in new traders over their investments. Unconfirmed reports of Japan, China, and South Korea banding together to regulate cryptocurrencies might have likewise contributed to the big sell-off.
Market Still Bearish
During the past week, the price of Bitcoin went from moving between the $13-14K levels to going back to its December range when it broke $10,000 for the first time. The highest price point was hit on Saturday afternoon when Bitcoin reached $14,613.70 while the lowest price point was hit yesterday evening when Bitcoin touched $10,211.30.
Driving the price decline was an increase in trading volume, which rapidly grew from being near $14 billion to almost $20 billion in 1 day. Currently, the volume is sitting at $18.6 billion and is slowly dropping while the market cap is at $181 billion.
Similar to last Wednesday, the trading market remains heavily pro-sell at this time, with 8 out of 12 oscillators and 12 moving averages sending a selling signal. The SMA 100 is still over the SMA 200, showing less resistance to the upside; however, market signals are yet to show oversold conditions, which means there might still be some selling force left. If buyers don’t return and the price breaks below $10K, it could lead to a reverse back to the $8,000 range. So stay vigilant for any news from the major markets.
Bitconnect Closes Exchange and Lending Service
Bitconnect, a platform for lending and exchanging cryptocurrencies that was described by many in the Bitcoin community as a plain old Ponzi scheme, announced yesterday that it will be shutting down its exchange service. The closure was revealed in a public statement posted on Bitconnect’s website where the service outlined 2 separate cease-and-desist orders from the security boards of Texas and North Carolina, several DDoS attacks, as well as “continuous bad press” as the reasons for the closure.
The exchange service had its own token called BCC which users could withdraw with instead of Bitcoin after making a “loan” to Bitconnect. The “lending” was done by users who invested their own cryptocurrencies in the platform, which then employed trading bots and its own “volatility trading software” to generate up to 1% returns per day, or roughly 30+% in over a month.
After the closure, the service announced they will be refunding outstanding loans of their users in BCC tokens at a $363.62 rate, which was the estimated average price during the last 15 days. However, considering the token price crashed down 80% on the news, there are likely many investors that have suffered bad losses, which might be one more reason contributing to the recent change in market sentiment.