Bitcoin had been trading in a fairly tight range around $10,000 early last week until Thursday when it fell below $9,000 and hit a low near $7,850 per coinmarketcap.com. Bitcoin briefly bounced back to $9,000 and then drifted back down to $8,000 on Friday. It climbed back to around $9,450 this morning but has slipped to $9,200.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
One of the challenges with trading, and to a degree investing in, Bitcoin and other cryptocurrencies is that they trade 24 hours a day, 7 days a week. Since they are so volatile trying to keep abreast on what is impacting their price is extremely difficult and probably very stressful.
Two reasons for the drop last week were concerns that the Indian government could ban cryptocurrency trading (but there is some dispute to this) and Facebook banning ads promoting cryptocurrencies and Initial Coin Offerings, or ICOs. Regulatory impacts are one of the 12 reasons I believe Bitcoin could fall to $1,000 or below. Another one is third parties changing their mind about supporting it. While the third party I wrote about was Visa any large organization, such as Facebook, pulling back support could have a large negative impact.
Broken key technical support levels
Bitcoin had previously found support at its 50-day moving average three times in the past year (the blue line on the chart below). It blew past the 50-day moving average in mid-January and then the 100 day moving average of $9,219 on Thursday (the red line).
If Bitcoin can’t sustain $9,000, it could lead to additional selling pressure as people who had made money buying it before December decide to take their profits or anyone who bought it after December 1 are underwater. They may decide to cut their losses and sell. Either way it could get ugly.
Bitcoin price chart
StockCharts.com
