BITCOIN CONTINUES THE DOWNWARD MOMENTUM DESPITE CRYPTO PUBLICITY
After weeks of gains, the price of bitcoin reversed last week and is now trading at a multi-week low of $7840. The decline came despite several high-profile events within the crypto space including Consensus 2018 in New York (which attracted a record attendance) and Token Summit which was held in the same city and welcomed thousands of attendees.
Prior to these events, traders were hoping there would be some clarity on crypto regulation issues – but this wasn’t to be. Speakers somewhat skirted around this topic during a week where traders and holders lost billions of dollars regardless of the increased crypto/blockchain publicity.
In addition to this, China released a White Paper that showed increased ICO activity in the country. The report revealed that 178 blockchain-related companies were started in 2017 bringing the total number to 456. The government reiterated the risks of ICOs and the need for increased regulations.
On the upside, Canaan – one of the largest suppliers of cryptocurrency mining hardware – announced that it would go public in Hong Kong valuing the company at more than $1 billion. This will be the first public listing of a company that provides mining hardware.
As shown below, bitcoin started the week moving higher against the dollar before reversing and continuing the downward momentum. The BTC/USD pair is trading below the 30 and 60-day Simple Moving Averages with the Parabolic SAR showing the potential of further downward momentum. The pair could continue moving downwards but still, short sellers need to be cautious that a reversal could happen. Traders should watch out for the $7450 level should the pair continue moving lower.