Bitcoin slump sees trades suspended on certain exchanges

Bitcoin slump sees trades suspended on certain exchanges

Bitcoin slump sees trades suspended on certain exchanges

Bitcoin plunged on Friday, extending a fall that saw the crypto-currency lose almost a third of its value from a record of nearly $20,000 (£15,000).

The crypto-currency's price dipped below $11,000 on Friday, according to the Coindesk exchange website, before recovering to above $13,000.

Amid the swings, three Bitcoin-related exchanges suspended certain trades.

Bitcoin has had a blistering trip over the past 12 months. Its price at the start of the year was about $1,000.

It has skyrocketed since – more than doubling in value since November – drawing interest from major firms as well as private investors.

But since Sunday Bitcoin has been on a losing streak, falling back to where it was at the start of December.

Analysts said investors should be prepared for such rapid changes, which have characterised the asset from its start.

"This is exactly how this asset trades and has done since the beginning," said Nick Colas, co-founder of New York-based DataTrek Research. "It has a lot of volatility and it will for the foreseeable future."

What happened on Friday?

This week's plunge led to a flood of trades that swamped one of Bitcoin's major exchanges, Coinbase, on Friday. A technical slowdown prompted the firm to halt buying and selling twice.

The CME and CBOE exchanges in the US also temporarily suspended trading of certain Bitcoin futures contracts, which allow investors to bet on where they expect the price of Bitcoin to be at certain points in the future.

The exchanges have automatic brakes that apply once a commodity or asset has moved by a certain amount – as happened in this case.

What sparked the slump?

The market remains driven by sentiment, according to Charles Hayter, founder and chief executive of industry website Cryptocompare.

"A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes," he said.

Some traders would have been cashing in on the spectacular gains made over the year, he added.

Concerns about the infrastructure behind crypto-assets may also be spooking investors, said Nick Colas, himself a Bitcoin trader.

In recent weeks, markets have been rattled by hacks and allegations of insider trading.

He attributes some of this week's slump to the launch of a new crypto-asset that came earlier than planned. The surprise temporary shutdown of Coinbase on Friday was the kind of thing that could erode investor confidence, he argued.

"It is not OK to just take trading offline randomly through the day," he said. "The robustness of that system is just as important to their confidence… as the price of crypto-currencies themselves."

A spokesman for Coinbase said the firm was working around the clock to ensure smooth trading. Friday's suspensions lasted for about two hours in total.

"We're doing everything within our power," the spokesman said.

What exactly is Bitcoin?

A digital asset, Bitcoin is not backed by any governments. It is created through a complex process known as "mining", and then monitored by a network of computers across the world.

There is a steady stream of about 3,600 new Bitcoins a day, with more than 16.5 million now in circulation. Supply is expected to peak at about 21 million.

Every single transaction is recorded in a public list called the blockchain.

This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undoing transactions.

What are authorities saying about Bitcoin?

Regulators around the world have stepped up their warnings about its provenance as an investment.

One of this week's most striking comments came from Denmark's central bank governor, who called it a "deadly" gamble.

Earlier this month, the head of one of the UK's leading financial regulators warned people to be ready to "lose all their money" if they invested in Bitcoin.

Andrew Bailey, head of the Financial Conduct Authority, told the BBC that neither central banks nor the government stood behind the "currency" and therefore it was not a secure investment.

Despite the risk to individuals, US authorities have said they do not think it is a big enough part of financial markets to be a threat to broader economic stability.

 

Source BBC News

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David https://markethive.com/david-ogden

Bitcoin Bulls Face ‘Alt’ Competition in Push to $20k

Bitcoin Bulls Face 'Alt' Competition in Push to $20k

Bitcoin Bulls Face 'Alt' Competition in Push to $20

Bitcoin may still be in the hunt for $20,000, but the bulls need progress soon else a minor pullback could be in the offing.

As per CoinDesk's Bitcoin Price Index (BPI), the cryptocurrency is trading at $17,539, having appreciated 4.48 percent in the last 24 hours to a new all-time high.

But while that's a modest, even impressive gain, it's worth noting that alternative currencies like litecoin and ether have strengthened by even more impressive rallies.

On the day's trading, the cryptocurrencies, the second and fourth by market volume, have seen 71.8 percent and 30 percent gains, respectively. Coinbase's GDAX exchange and South Korea's Bithumb have emerged as the primary drivers.

All told, though the stellar performance of litecoin and ether could be indicative of their availability and appeal to new buyers. Hence, a minor correction in bitcoin (BTC) cannot be ruled out as other assets garner attention.

1-hour chart

Bitcoin Bulls Face 'Alt' Competition in Push to $20k

The above chart shows:

  • Bull flag breakout followed by a nice rising lows pattern as represented by the ascending trend line.
  • The relative strength index is above 50.00 (in the bullish territory) and is trending.
  • The 1-hour 50-MA is curled up in favor of the bulls.

View

 

BTC could cut through the resistance at $17,500 and make a move towards the $18,300-$18,500 level over the next 12-24 hours.

Overall, the cryptocurrency looks set to test the major psychological level of $20,000. As noted earlier today, only two end-of-day closes below the $14,000 would abort the bullish view on the charts.

Author: Omkar Godbole

 

Posted by David Ogden Entrepreneur
David Ogden Cryptocurrency Entrepreneur

David https://markethive.com/david-ogden