The bitcoin price plunged below the $10,000 support level in a correction that analysts are attributing to increased pressure from regulators throughout the world.
The bitcoin price dipped below $10,000 on Tuesday, deepening an early-week correction that began on Monday on the heels of a fleeting $13,000 weekend rally.
At the time of writing, bitcoin was valued at $9,965 on Bitfinex, whose BTC/USD trading pair is the cryptocurrency’s most heavily-traded market. This represents a single-day decline of about 11 percent and leaves bitcoin with a market cap of just $172.8 billion.
The consensus among analysts is that bitcoin’s recent struggles are tied to increased pressure from regulators in a variety of jurisdictions. As BlockTower’s Ari Paul wrote yesterday on Twitter, the cryptocurrency markets tend to advance in a boom-bust cycle that is largely tied to new regulations.
“The single-biggest dynamic driving cryptocurrency markets on a long time frame is the reflexivity of regulation,” Paul wrote. “Crypto value rises sharply — it invites regulation that kicks it back down.”
Paul said that the bulk of the recent bear market’s trajectory could be attributed to South Korea. As CCN.com has reported, the government’s executive branch has repeatedly issued conflicting statements about its stance toward cryptocurrency trading, making it more difficult for the market to achieve a firm footing.
Moreover, banks in India have reportedly begun closing accounts that belong to cryptocurrency exchanges, creating the potential for turmoil within the domestic markets. Though India is not a major economic center for cryptocurrency trading, the country accounts for an estimated 10 percent of all bitcoin transactions. Consequently, the news is likely a factor in the recent price decline.
Finally, US Securities and Exchange Commission (SEC) Chairman Jay Clayton said earlier this week that he has instructed SEC staff to be on “high alert” for initial coin offerings (ICOs) that violate securities laws, perhaps hinting that the agency is preparing to step up its intervention in the nascent ICO fundraising industry.
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Last modified: June 14, 2020 10:58 AM UTC