BITCOIN FALLS AS SOUTH KOREAN EXCHANGE GOES BUST
On Wednesday, Bitcoin fell after South Korean-based exchange, Youbit, filed for bankruptcy following a supposed hack from the North.
In the United States, Coinbase, announced that it was starting an investigation on alleged insider trading involving bitcoin cash which had just started trading on the platform.
Further, reports from the CME and CBOE indicated that the demand for bitcoin futures were not as high as expected.
Analysts interviewed by Wall Street Journal explained that big hedge funds and investment firms were studying the bitcoin market before entering their trades.
On the same day, WSJ reported that an unidentified trader or traders had placed a million dollar bet that bitcoin will trade at above $50,000 by the end of 2018.
Because of the negative headlines, the prices of bitcoin fell from under $20,000 to find support slightly above the 38.2% Fibonacci retracement level and settling at the 23.6% level.
Further, historically, bitcoin has experienced similar pullbacks when it hits a psychologically significant level. A few weeks ago when it hit the $10,000 level mark, it had a pullback to under $9,500 before resuming the upward trend. Also, historically, bitcoin has pulled back when there are reports of hacks in the exchanges.
Therefore, the current pullback can be taken as an ideal entry point for people bullish on bitcoins.