Bitcoin News: As bitcoin loses its temporary stable state and slumps again, the technicals for 2019 does not that bright. While the market is expecting a turn around in the new year, no catalysts that can pull this off seems to be lingering on the horizon.
BTC slipped around 5.9% to $3,668.09 on Wednesday, nearing its more than one-year low of $3,522.58, which was reached on Nov.26. After a very short breath of relief, the relative stability has been replaced by an increase in volatility in the wake of November’s plunge, reportedly the biggest monthly drop in over seven years.
Earlier this year, BTC underwent a strong selling trend that pushed it from its $9,300 mark in May to around $6,600 mark in July, according to the Directional Movement Index. The current situation is quite similar, are we treat it as an indicator for the future, then the largest cryptocurrency is in for a further nosedive.
Another negative indication comes from, the Average Directional Index, or ADX, a technical indicator that rises as negative selling trends strengthen. The ADX is at its highest level since July, currently hovering around 47. If it crosses above 50, that will be the first time it does so this year in a negative pattern.
Bloomberg Intelligence analyst Mike McGlone noted on Wednesday that Bitcoin and other cryptocurrencies are likely to tumble further. Bitcoin could be falling around $1,500, an additional 60% drop in Bitcoin’s price from its current level. In retrospect, from its record high in December 2017 when it hit $19,511, the token is already around 80% down. He wrote:
“There’s little to prevent fading Bitcoin prices from reaching the continuous mean of $1,500.“
He elaborated that investors seem to be in a rush to exist, with the Bitcoin Cash split and selling related to year-end tax purposes being the key triggers. Last month, Cryptocurrencies have observed a massive sell-off in the last month. BTC has shed billions in market value since Bitcoin Cash forked in November. McGlone said in an interview:
“We’re at a classic psychological stage where the market is reversing the 2017 frenzy. The hard fork was a key trigger that signaled the technology is way too nascent. You had these dicey characters threatening to destroy each other and institutions said ’It might be best if we stay away from this for a while.”
The crackdown led by the Securities and Exchange Commission, as it fined two companies last month that hadn’t registered their initial coin offerings as securities. SEC’s commissioner Jay Clayton points some key upgrades that are missing from the market in regards to a lack of investor protections.
The series of rejections and delay in the approval of a Bitcoin exchange-traded fund by the SEC has further lowered the market’s enthusiasm. Many a bitcoin bulls were depending on them to pull the market back from its slumping crouch.
McGlone adds that lower prices indicate reduced speculative excesses and are helping to reduce volatility. He added:
“But the trend this year is clearly sustainable — it’s a positive trend. The trend is lower prices, lower volatility, reduced speculation, and the preponderance of stable coins.“