Bitcoin acquisition is evolving with the speed of light in this crypto-oriented world. Bitcoin experienced a flash Crashdown over the weekend, pudding approximately 14% before rebounding on Saturday night from almost $59,000 to $51,000. Some other popular cryptocurrencies including Dogecoin and ethereum also experienced dramatic downfall before recouping some of their losses. Bitcoin prices faced immense evolution this year and have brought from hype to mainstream but the sharp prices plunge this weekend is absorbed to be triggered by an unconfirmed rumor on Twitter. The rumor was that the US treasury is planning to crash down on money laundering schemes including cryptocurrencies.
This rapid decrement in bitcoin prices overnight is the latest indicator that the cryptocurrency market is remaining wildly inflammable. Cryptocurrency enthusiasm seemed to strike the hype last week as the trading platform coinbase went public by hitting the value of $86 billion, going along with 500% in dogecoin which is basically an asset that was created as a joke back in 2013. Cryptocurrency supporters have spent numerous years emphasizing that bitcoin, ethereum, and other digital assets can completely revolutionize the finance world. Those supporters are finally having their moment with the success of Wall Street of Coinbase debut Wednesday.
Why Is Bitcoin Tumbling?
There is no one answer to the question in the case when especially those assets are involved which are as opaque as cryptocurrencies where buyer and seller are usually ambiguous.
Analysts came across the following reasons:
- The Turkish central bank claimed on Friday that they would ban their utilization as a form of payment from April 30. They would prohibit such organizations that handle electronic fund transfers for processing such transactions that involve cryptocurrency platforms. Other sources of regulatory pressure involve the plan of the central bank to create digital currencies for example in inner Mongolia, China’s for the yuan has also banned cryptocurrency mining.
- Any bigger rally provides the capability to the market to get frontwards of itself. The long term crypto bull and galaxy digital founder Michael Novogratz tweeted that,
“It was inevitable with hindsight. The market went too excited around the $Coin direct listing. Coins such as $XRP, $BSV, and $DOGE are evolving. All were clues that the market also got one way. In the medium term, we will be fine as more institutions are coming into space.”
- On Saturday, It was reported by Coindesk that power outages in parts of China had drained a sufficient amount of bitcoin mining capacity, resulting in a decrement in the all-inclusive processing power of the cryptocurrency network.
A Melbourne based market analyst at IG, Kyle Rodda claimed that
“Bitcoin prices went crazy especially on weekends because it is one of those fewer markets which are open to trade in. It has also lost some buyer’s support. ”
Unfortunately, bitcoin faced a decrease of $10,000 over the weekend. The technical picture which was going into the weekend was bullish for bitcoin as it possessed a series of higher lows and higher highs since the beginning of this year.
The pivotal downfall hit $51,300 and did not bend towards testing the decrement on 25th march. The chart pattern still depicts that the momentum is weaker. There is a break below white lines that have been developed since the trading of January and February respectively. This further dips the upside momentum but buyers are still hanging in there as their grip 25 march downfall, the $50,000 physiological level. The 100-day in motion average is observed at a price of $48,000.
There still exists some approximation of upside propulsion encountered in bitcoin price action. Let’s drill down to the near-term chart.
The bounce faces a price nudge back above the 38.2 hypothesis level of the recent swing lower. That is some stimulation at least after the beginning of the rebound. But there still exist plenty of tests for buyers to try and fight back near-term control with the broken regression curves support levels which are now proceeding as a resistance level.
China Now Call It An ‘Investment Alternative’
The central bank of china is now claiming bitcoin as an investment alternative, marking a fundamental conversion in Beijing’s tone after a suppression on cryptocurrency issuance as well as trading approximately 4 years ago. Industry insiders name the comments as “progressive” and are closely observing any regulatory changes which are made by the People’s Bank of China, abbreviated as PBOC.
The deputy governor at People’s Bank of China affirmed on Sunday during the panel which was hosted by CNBC for Asia at the Boao forum that
“We consider bitcoin as well as stablecoin as crypto assets. These are basically investment alternatives. The main role these digital cryptocurrency assets will play is investment alternatives. ”
China is one of the biggest buyers of bitcoin all across the globe but back in the year 2017, China banned initial coin offerings, abbreviated as ICO’s, a method to raise money for crypto-oriented companies by issuing digital tokens. Also during that same year, higher authorities prohibited local cryptocurrency exchanges. These steps were taken for financial stability.
Hence China has been carrying out numerous tests on digital assets such as cryptocurrencies in major cities. Li Bo, the deputy governor at PBOC claimed that the central bank could try the digital yuan with foreign visitors during the Beijing winter Olympics 2022.