LONDON (Reuters) – Bitcoin dipped almost 8% on Thursday, extending losses the day after U.S. Federal Reserve Chairman Jerome Powell called for a halt to Facebook’s Libra cryptocurrency project until concerns ranging from privacy to money-laundering were addressed.
The original cryptocurrency initially fell 7.7% to $11,164 in early morning trade, following a 3.8% slide on Wednesday after Powell’s testimony on monetary policy before the U.S. House of Representatives Financial Services Committee. It was last down 4.5%.
Other major cryptocurrencies including Ethereum and Ripple’s XRP fell by similar levels.
“This is a direct response to the Powell testimony and comments on Facebook’s Libra and the implications that could have for the entire cryptocurrency space,” said Craig Erlam, senior market analyst at FX trading platform OANDA.
“Libra raises many serious concerns regarding privacy, money laundering, consumer protection and financial stability,” Powell told the committee, adding that he did not think the project could proceed unless those concerns were addressed.
The proposed cryptocurrency has drawn close scrutiny from policymakers and financial regulators globally. Powell said existing rules do not fit cryptocurrencies.
Other traders said the moves fitted within the pattern of bitcoin’s recent volatility, where double-digit intra-day price moves have been common.
The biggest coin climbed nearly 55% in nine days after Facebook unveiled its plans for Libra on June 18, touching an 18-month high of nearly $14,000. The project has boosted hopes that cryptocurrencies could gain wider acceptance.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 7991. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
As part of the Bitcoin exchange rate forecast, a test level of 8200 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 7260. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at 8420.
Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 8540. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In case of breakdown of the lower border of the Bollinger Bands indicator bands, one should expect acceleration of the fall of the cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019 implies a test level of 8200. Further, it is expected to continue falling to the area below the level of 7260. The conservative area for selling Bitcoin is located area of 8420. Canceling the option of falling cryptocurrency will be a breakdown of the level of 8540. In this case, we can expect continuation growth.
Bitcoin re-enters $8,000-zone, but what is its upside potential? – Confluence Detector
- BTC/USD went up from $7,998.50 to $8,077.50 this Thursday.
- The daily confluence detector shows two healthy resistance levels to overcome on the upside.
Following two straight bearish days, which took the price below the $8,000-zone, BTC/USD is on the course to recovery. Bitcoin had gone up from $7,998.50 to $8,077.50 this Thursday before it improved further to $8,087.40 this Friday. The hourly BTC/USD chart shows us that the market found intra-day resistance at $7,943.15 before it bounced up to $8,075. Since then, the price trended horizontally for a bit, negotiating with the $8,090 resistance line. The bulls managed to rally together to break past it and go up to $8,110, before correcting itself to $8,087.40.
BTC/USD daily confluence detector
The daily confluence detector has two healthy resistance levels at $8,190 and $8,260. $8,190 has the five-day Simple Moving Average (SMA 5) and one-week Fibonacci 61.8% retracement level. $8,260 has the SMA 100, one-day Pivot Point resistance two and one-day Bollinger Band middle curve.
On the downside, there is a support level of note at $8,065, which has the SMA 5, SMA 50, SMA 200, one-hour Bollinger band middle curve, one-day Fibonacci 38.2% retracement level and one-hour previous low.
Bitcoin could become store of value, as institutional interest increases
Institutional interest in Bitcoin has seen a significant rise in 2019, as several derivative financial products on top of Bitcoin have flooded the market. Active exposure of these investors to the digital asset realm has brought back the debate about whether Bitcoin is the new “store of value.” According to Grayscale’s managing director Michael Sonnenshein, there has been a certain shift in perception for sure.
Sonnenshein appeared on ‘The Scoop‘ recently to discuss the impact of institutional investor’s exposure to the digital asset class. The managing director of the firm believed that although Gold has been the standard store of value for centuries, and it made sense in the physical age, but given the rapid growth of the digital monetary age, Bitcoin for sure is challenging to become the new store of value. He explained,
“It is now nearly 2020 and we’re starting to ask investors with this question which is, what constitutes a store of value? It historically has been gold but that may have made more sense for a physical age. As we are in fully immersing ourselves now in this digital age perhaps gold doesn’t hold up as much as it once did as that store of value and perhaps investors need to think about a digital store of value such as Bitcoin.”
Institutional investors hold the key for Bitcoin and any other digital asset to gain mainstream adoption, and as of today they are more aware and learned about Bitcoin and its potential as an investment than ever before. More importantly, these investors are using Bitcoin as a hedge fund and store of value to diversify their investment portfolio as well as make quick capital gains on their investment.
The increasing interest of institutional investors is evident from the fact that GrayScale registered its highest gain in the last quarter with over $250 million raised from the investors, Binance has registered the highest daily volumes of over $700 million from its Binance futures platforms. Bakkt has launched its futures contracts recently while CME’s futures contracts year-to-date volumes have seen a significant rise over the past year.