Fall­ing Bit­coin caught up in a strong selling trend

Cape Times - - NEWS - VILDANA HAJRIC

BIT­COIN is turn­ing nega­tive again. And the tech­ni­cals aren’t look­ing too good ei­ther go­ing into 2019. The largest cryp­tocur­rency slumped, reach­ing an­other fresh low for the year.

The dig­i­tal to­ken dropped as much as 4.2 per­cent to $3 567 (R50 400) yes­ter­day, flirt­ing with the prior 2018 low of $3 522 reached on Novem­ber 26. It’s trad­ing around the low­est level since Septem­ber 2017.

After a few days of rel­a­tive sta­bil­ity, volatil­ity has in­creased again in the wake of Novem­ber’s plunge, which was the big­gest monthly drop in more than seven years.

Bit­coin is caught in a strong selling trend – its most pro­nounced since the sell-off it un­der­went mid-year, when the price tum­bled from about $9 300 in May to around $6 600 in July, ac­cord­ing to the Di­rec­tional Move­ment In­dex. If that plunge is an in­di­ca­tor of how things might play out, then Bit­coin could be in for a con­tin­ued rout. In ad­di­tion, the Av­er­age Di­rec­tional In­dex, or ADX, a tech­ni­cal in­di­ca­tor that rises as nega­tive selling trends strengthen, is at its high­est level since July. If it crosses above 50 – it is cur­rently hov­er­ing around 47 – it will be the first time it does so this year in a nega­tive pat­tern.

Prices for Bit­coin and other cryp­tocur­ren­cies are likely to weaken, with Bit­coin fall­ing to around $1 500, said Bloomberg In­tel­li­gence an­a­lyst Mike Mc­Glone in a note on Wed­nes­day. That would im­ply an ad­di­tional drop of 60 per­cent in Bit­coin’s price from its cur­rent level. Bit­coin has fallen close to 80 per­cent from its De­cem­ber 2017 record high when it hit $19 511.

“There’s lit­tle to pre­vent fad­ing Bit­coin prices from reach­ing the con­tin­u­ous mean of $1 500,” wrote Mc­Glone. A rush to the ex­its among in­vestors seems to be in place, he said, at­tribut­ing it to the Bit­coin Cash split and selling re­lated to year-end tax pur­poses, among other things.

Cryp­tocur­ren­cies have seen a mas­sive sell-off in the last month, with the largest tokens shedding bil­lions in mar­ket value since Bit­coin Cash forked in Novem­ber.

That came as two soft­ware-devel­op­ment fac­tions failed to agree on a way to up­grade the off­shoot of the orig­i­nal Bit­coin, lead­ing to a com­put­ing power arms race. | Bloomberg

Bloomberg

PRICES for Bit­coin and other cryp­tocur­ren­cies are likely to weaken, with Bit­coin fall­ing to around $1 500, says Bloomberg In­tel­li­gence an­a­lyst Mike Mc­Glone. |

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