Our favourite digital currency, the Bitcoin, started moving into a positive direction and did just fine several weeks ago. However, its value noted stagnation and then started falling without any apparent reason to do so.
Today we can see that, after skyrocketing towards $500, the Bitcoin price per coin has fallen under $320. Nevertheless, this time there is one particular event that directly affected this drop – EU’s threats to crackdown electronic payments, virtual currencies and anonymous use of pre-pad cards.
When one of the strongest allies of Bitcoin decides to take such steps into consideration, it’s not surprising to see the currency’s value stumble.
European Union Threatens to Ban Digital Currencies
Even though Nasdaq gives fair points why a possible European crackdown on bitcoin would be misguided, the likelihood of this threats to become reality is extremely high.
Those wondering why the EU would go for such dramatic measures probably missed the reports that the recent Paris shootings were funded by anonymous Bitcoin payments. Thus, it’s not such a surprise to see the Union wanting to prevent something similar from happening in the future. Obviously, the right way to do so, according to the EU, is to ban cryptocurrencies alongside all other electronic payment methods that are untraceable and provide anonymity to those that take part in the transactions.
These threats, alongside the worrisome possibility to see the US interest rates hiked as soon as this December, negatively affected the Bitcoin price and further drops might be expected in the days to come.
Daily Low a Bit over $310; Indicators Signal to Sell
Ever since yesterday, when the news about EU’s plans hit the public, the Bitcoin has been slowly decreasing. The current trading price of the currency is $317.71, whereas the daily low is far from good $310.84. If this trend continues, the Bitcoin might drop under $300 very soon. The day’s high for the last 24 hours is $334.69.
This fall of the Bitcoin value has affected the year to date change and the market cap. Thus, these two dropped at 1.25% and $4.46 B. The volatility noted on our price chart is 16.61%, whereas the volume is 70,401.19.
These not so positive moments for the Bitcoin are accompanied by technical indicators and moving averages that signal traders to sell. The 14-day RSI has a value of 43.325, while the MACD is set in the negative at -3.010. The ROC, similarly to the MACD, is in the negative too and has a value of -1.785.
The moving averages, both simple and exponential, point selling as the better option at this particular moment. Aside from the 5-day SMA ($316.48) and EMA ($316.55) and the 10-day SMA ($314.85) and EMA ($317.04) that are pro-buy, all other moving averages are pro-sell. For example, the 200-day SMA has a value of $326.50, while the 100-day SMA is set at $326.00.
Knowing these numbers, we can set the intraday support level at $300 and place the intraday resistance level at $340. We would suggest traders to be careful with opening any trades until there’s more information regarding the EU ban of Bitcoin; if that happens, the currency might note a sharp drop in value.