Slumping Bitcoin Worth Buying?
| Nov 22, 2018 03:35AM ET
Bitcoin is back in the spotlight. Only this time, it captured market attention not with its long-awaited growth, but as a result of its slump through the psychological support of $ 5000. It is worth noting that the BTC decline is not supported by any convincing fundamental data. Such selloff would be much more logical on the back of another successful cyber attack or if some massive bitcoin blockchain vulnerability was discovered. However, there was no such news.
The only thing we can cling to is a scheduled upgrade of Bitcoin Cash network. The hard fork took place on November 15 with development teams launching two competing, incompatible BCH implementations - Bitcoin ABC and Bitcoin SV, which resulted in a hash war. Further development of events reminded battlefield. The Bitcoin SV team attacked the Bitcoin ABC network during its upgrade. No harm was done though. A few days after the hard fork, Bitcoin SV was allegedly experiencing a block reorganization attack, which could delay or even reverse transactions on a blockchain. However that may be, and whoever was behind it, the exchanges decided to take care of investors, freezing all operations in both cryptocurrencies. Now, a week since the hard fork, the situation has not changed at all. Transactions are not carried out, debates between the developers continue. There is an opinion that it was the conflict among former like-minded that influenced general market sentiment, provoking a bearish rally in the entire crypto industry.
Another interesting interpretation of current events - coordinated and well-planned actions of the so-called cartel, which continues to manipulate Bitcoin prices and trigger a dump. They supposedly stepped into the market in December 2017 when bitcoin futures contracts were launched. Since then, from time to time, the cartel decides to go short. But why did this sell-off turned out to be so massive this time? The thing is that cartel’s speculative attack and their one-time dump of BTC coincided with the test of the psychological support. The support breakout became the catalyst for panic sales. For a long time, cautious investors were fixated on the idea that Bitcoin’s bottom is located at $5000 support, and they were convinced that it would never fall below this barrier. What happened next opened their eyes to the possibility that BTC may well fall much lower than this mark.
As a rule, such price movements become exhausted pretty quickly, and the recovery commences. We shouldn’t dismiss Bitcoin yet, as it’s still not accessible to institutional investors. They are likely to enter the market next year which could beсome a new driver for growth. Besides, if the so-called cartel does exist, the next attempt to push the prices down can be made only when the BTC retraces back to its local maximum at the downtrend line. According to the chart, it’s located in the $ 6000 region. We can safely buy bitcoins at the current price at least up to this level.
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