The market is undergoing continuous decline today after the overall market cap dropped $16 billion in 24 hours.
Bitcoin is down 8 percent and dropped from $6,700 earlier today now trading at under $6,200 with $6,000 being considered an important line of support.
Meanwhile, Ethereum is down 10 percent and EOS is down over 15 percent. Litecoin has hit a 7 month low of $75, dropping 11 percent.
Market analysts and pundits have offered a variety of views on the subject, with the possibility that news from Japan has influenced the decline. Japan’s Financial Service Agency issued 6 exchanges with business improvement orders after conducting on-site inspections.
The national regulator is seen as cracking down on the exchanges by many after declaring that the exchanges needed to improve KYC regulations and work towards reducing risk. Major exchange bitFlyer responded by voluntarily announcing that they would no longer be accepting new customers pending review of their operational practices. bitFlyer will also be reviewing current identifications of existing users as part of the anti-money laundering measures.
Ryan Rabaglia, head trader of crypto-firm Octagon Strategy Limited, said:
“The market is still trading on low volumes and has yet to break out of its current downtrend, leaving itself susceptible to sell-offs. Although the market reacted negatively, I view this as a positive for the industry as a whole.”
On Monday, Blue Line Futures president Bill Baruch said that Bitcoin’s decreased volatility signaled that selling may finally be exhausted and may be bottoming out at around $6,000. He attributed the huge surge in value seen in December with the introduction of CME and CBOE Bitcoin futures allowing people to take long and short positions on the value of Bitcoin, with “tremendous speculation and the fear of missing out” seeing prices “sky-rocket too quickly.”
Baruch feels that the over-enthusiasm that caused unsustainable growth has now died down, which can now contribute to healthier and more natural market growth, saying that if the $6,000 support line holds we may see more constructive upward movement. He also pointed out, however, that the 100-day moving average was down to $4,550 at the time. Baruch outlined the $10,000 mark as a “crucial line in the sand”, and even advised selling against it.
It’s possible that the decline will continue in the short term as traders seek to preserve holdings, with eyes now on the $6,000 mark as a measurement of how far the decline will go before finding support and consolidating once again.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:09 PM