Last month was very interesting on the crypto charts. While June was full of green, July was marked mostly by the red color. What has happened with Bitcoin recently?
This is the second episode of our cryptocurrency market analysis. In the first one, we praised the growth of Bitcoin. Today, however, we don’t have that much good news.
McAfee strikes again!
Antivirus developer and peculiar millionaire John McAfee continues to maintain his positive vision of the BTC course, where it is possible to reach $1 million by the end of 2020.
Bears started an intensive attack on BTC on Sunday, July 14th, contributing to the drop at a level of $10,000 for the second time since the beginning of July. As a result, the most popular cryptocurrency had a weekly decline of nearly $1400, and the total capitalization of the entire virtual currency market came to less than $300 billion.
The opposition is not so terrible.
On July 12, Tuur Demeester published a chart showing BTC price volatility since 2011, indicating that July has been a variable month over the last few years, and statistically, there was a downward trend in August.
Although the size of the fall may be shocking, it should be borne in mind that such adjustments become the norm for BTC quotations. Long-term investors are aware of the fact that sudden, unpredictable prices tend to follow parabolic increases, and the current correction may be an opportunity to accumulate a higher number of BTC.
A bump on BTC and fluctuating of other cryptocurrencies
During Tuesday’s session, i.e. on July 16, 2019, the BTC quotations went down again, which was connected with a negative reaction to the hearing of Facebook representatives by the US Senate banking commission regarding the Libra cryptocurrency project. On Wednesday, the BTC course deepened its declines and tested the lowest levels in a month, around $9200. The drop in BTC also resulted in a high volatility of the remaining 10 largest digital currencies. The entire cryptocurrency market fell by more than USD 20.1 billion.
Tuesday’s drops were the biggest since June when the BTC course tested levels above $13500. Such a persistent state of affairs may significantly accelerate the dynamics of the decline, and the first local support is at the level of $9000 (maximum in May) and $7500.
Donald Trump in social media
Donald Trump will undoubtedly go down in history as the president for whom communication with voters and citizens takes place to a large extent through the social media. On 11th and 12th July the US President published tweets in which he presented his opinion on the BTC and Libra Facebook.
Then he moved on to LibraCoin, the digital currency of Facebook.
Time to start presidential campaign?
In the USA, digital currencies are slowly becoming more and more popular. The question is whether Trump’s tweets are the beginning of an election campaign. On the one hand, this seems unlikely, but on the other, it is a good excuse to highlight the importance and strength of the dollar in economic policy.
In addition to Donald Trump, Andrew Yang and John McAfee are running for the presidency, who are in favour of blockchain and cryptocurrency. However, at present they have a doubtful chance of electoral success.
At the end of my previous analysis, I shared with you my scenario for further course opportunities, which in retrospect proved to be accurate. If any of you expected the price to rise to the levels of $12100-$12400, about which I wrote, and then decided to enter the market by playing for the BTC price decrease, you also chose a good strategy. I was suggesting that the target level is $9,000. At the moment, however, I believe that after the above mentioned reports the exchange rate is continuing its downward trend quite quickly and the current pace may lead to even greater decreases, i.e. $8300 or $7500.
Undoubtedly, the current BTCUSD level for those of you who have opened a declining position at the suggested levels from the previous analysis, now have a rate of return above 20% and can successfully close it. I, on the other hand, am still on the supply side. In order to minimize the potential risk, I set a stop loss at the market entry level. This ultimately guarantees me protection of the capital, but with no profit guarantee. Time will tell which solution will be more profitable.
The current level and stagnation suggests that we are dealing with accumulated buy and sell orders. If the $9000 level were to be outbid, the lowering of the value could significantly accelerate.