Following the recent consolidation phase, bitcoin has suffered huge losses this week. Amid a growing list of factors weighing on the cryptocurrency, the price dipped below the key $10,000 support which triggered a more aggressive sell-off. As a result, the asset has cracked below $9,000 for the first time since November and moved to the lowest levels since November 25th around $8,300.
The digital currency has sunk into the mire of negative news lately. Traders perceive every regulatory blow quite painfully and don’t see any bullish drivers in the market. In addition to the recent news on Facebook that is going to ban ads for ICOs, the lingering “bubble” concerns, fraud fears and signs of heavier regulation in South Korean, India is said to be mulling increasing regulation, while in China, bitcoin ads has disappeared from social media.
At this stage, the policy makers’ and regulators’ stance, which is getting more and more aggressive, is consistently taken by investors as a sell signal. But in the longer term, the current regulatory crackdown looks necessary for this messy market to survive. Since bitcoin has breached two psychological barriers, there is a high risk of testing the next “round” $8,000 level. Moreover, the digital asset may go even lower, before finding a bottom.
By Helen Rush
Senior Analyst at Capital Markets