Even though Bitcoin (BTC) was pretty much bullish last few weeks, overreaching $12,000 several times, the correction, as sad as it sounds, had to happen. The number one cryptocurrency last traded below $10,000 on July 31., and at the time of writing it fell 7.6% to $9,796.00.
There are plenty of reasons for this cragged behavior. When the bulls are taking the wheel, everybody’s talking how Bitcoin is rising thanks to the China-U.S. growing tensions, and when the bears take over – everybody blames the same tensions and its repercussions.
Two weeks ago, Galaxy Digital CEO Mike Novogratz compared the rise of a Bitcoin with a price of yuan saying:
With the yuan over 7.0, an FX war, instability in HKG and the beginnings of capital flight, $Btc rally could have real legs.
— Michael Novogratz (@novogratz) August 5, 2019
Co-founder of market research firm DataTrek Research Nicholas Colas commented on the fact that traders both in Hong Kong and Argentina have been using Bitcoin as a safe haven asset for a long time now. Also, former executive director at Deutsche Bank Peter Tchir confirmed in his article that Bitcoin is a main indicator of hidden geopolitical tensions.
Now, crypto traders are getting divided into three main groups regarding Bitcoin price predictions.
The bearish ones think Bitcoin will slide even further to $8,500–$7,500.
The second group is a little bit more objective saying Bitcoin will consolidate between $9,000 and $12,000 just before its rewards halving in 2020.
Are you afraid?
I am not.
(Fear & Greed index currently at the Dec/2018 lows)
— Alex Krüger (@krugermacro) August 14, 2019
The most optimistic group still believe that Bitcoin will rally to its year high that is going to be around $20,000 in about a month.
To be realistic, we should stick to the fact. The truth is that BTC is most likely to bounce in the $9,900 region because this is where the 0.786 Fibonacci Retracement and 1.6 times the 350-day moving average sits so this region could act as a strong bounce zone.
In his recent analysis, Mati Greenspan, senior market analyst at brokerage eToro, wrote that once again Bitcoin is searching for support and having troubles with finding it. He discussed whether this fall is connected with China’s yuan recovery or problems in Argentina.
What's driving bitcoin lower at the moment?
Could it be Yuan devaluation, trouble in Argentina, central banks, or other factors?
— Mati Greenspan (@MatiGreenspan) August 14, 2019
“Bitcoin and cryptocurrency volumes are back to normal today throughout the market but the price seems to be gradually falling. Many analysts have been doing their best to tie in the latest moves in the crypto market to the uncertainty in geopolitics but it’s difficult to say exactly how much connection there really is.”
Chief executive of Euro Pacific Capital Group, Peter Schiff, commented that the latest crypto drop is a result of recent buyers cashing out of the market.
CNBC is trying its best to dupe its audience into buying Bitcoin. Despite gold being a much larger market, CNBC devotes far more airtime to Bitcoin. The Chinese aren't buying Bitcoin as a safe haven. Speculators are buying, betting that the Chinese will buy it as a safe haven!
— Peter Schiff (@PeterSchiff) August 5, 2019
What actually happened is the slowest growth for Chinese industrial output in the last 17 years, suggesting tariffs are influencing demand.
Last week, China got the yuan to break through the key 7-per-dollar level for the first time since 2008, and that concurred with a 7% gain for Bitcoin and a 9% rise in cryptocurrencies’ market capitalization, leading to speculations that Chinese traders are selling the yuan in order to buy crypto.
PlusToken Scam May Be a Reason of BTC Slump
Chinese venture capitalist, Dovey Wan, explains that this sell-off might be a result of a Ponzi scheme.
In her tweet, she claims that PlusToken, a Chinese seeming pyramid scheme, managed to make away with over 200,000 BTC and over 800,000 Ethereum.
I mentioned it briefly in my last Coindesk oped but worth additional attention as it may cause further sells pic.twitter.com/uIjgrzwHET
— Dovey Wan 🗝 🦖 (@DoveyWan) August 14, 2019
Wan believes that those individuals created a fake wallet with a “high yield investment return” that ended with fake 10 million investors sending capital to the platform.
According to a police report, the known addresses of PlusToken, which span multiple blockchains, contain billions of dollars worth of cryptocurrency. However, not all were jailed and some of them allegedly still have the keys. Wan claims security auditing firm Peckshield discovered that more than 1,000 Bitcoin has been recently sent to Huobi and Bittrex from PlusToken’s known accounts.