BITCOIN BOUNCES BACK AFTER WEEKEND SELL-OFF
Two weeks ago, the price of bitcoin dropped sharply from $7580 to $6730 after a South Korean cryptocurrency exchange was hacked. Since then, the price of bitcoin has remained at these low levels and this weekend, the price dropped to below $6,000. This was the lowest level since February this year. The sharp decline came as traders started worrying about regulations and the security of their holdings.
After the hackings that happened in the past two weeks, regulators around the world grew concerned and initiated talks on how to regulate the sector. Traders view these regulations as being counterproductive to the whole idea of blockchain which is ultimately designed to be transparent, unregulated and not governed by any third party.
Crypto security has always been an area of concern. Critics of digital tokens believe that the decentralized system makes it possible for people with bad intentions to gain access. Moreover, most of the crypto exchanges have been accused of manipulating the price of cryptocurrencies. For example, in December, Coinbase – one of the largest exchanges – announced that an insider trading investigation was underway. Last month, Upbit – the fourth largest exchange in the world – announced that it was being investigated for deceiving investors.
Today, the BTC/USD pair is trading at $6150, which is a bit higher than the pair’s weekend low of $5945. The current price is also lower than the previous support level of $6450 which the pair reached in April. The price is also below the short and longer-term moving averages. Its RSI has moved from 19 during the weekend and is currently at 39. There is a likelihood that the pair will continue moving up as traders pick the bottom. If this happens, traders should pay attention to the $7,400 and $7800 which are the 38.2% and 50% Fibonacci retracement levels.