As investors were tired of repetitive price action that did not offer quick profitability amid a boring, long and slow consolidation in 2018, the eager traders sought out new markets to transfer their funds and decided to limit their flows to Bitcoin. At the same time, the lack of volatility affects the day traders and speculators of last year’s crypto boom. Thus, the main cryptocurrency was abandoned due to the lack of investment and the lack of motivation for the market to return around the highs of 2017.
As I mentioned above, Bitcoin is almost 70% since the beginning of the year and has dropped by about 80% of its peak of $ 20,000, reached by the end of 2017. And this is the biggest correction since 2013-2015. Last month, prices were seriously affected by the Hard Fork news at Bitcoin Cash.
This hard fork is a dark side in Bitcoin’s history, as the war has almost crashed the entire market to historic bottoms. At the same time, it also causes sharp sell-offs for other cryptocurrencies, causing chaos in the global crypto industry.
This move has led many miners to close the shop and sell their assets to recoup their investment loss as the BTC’s fall below $ 4,000 in the second half of November has increased operating costs to mine bitcoins with no profit margin. Many of the miners they closed were speculators and amateurs who came during the bullish rally in 2017. They spent a significant portion of their live savings, putting them at huge losses. Since BTC/USD lost more than 30%, with no visible signs of a rally, all other unprofessional investors quit trading with Bitcoin.
In addition, at their meeting in Argentina, the G20 leaders decided to set up an international system to tax cross-border payments. The aim is to capture cases of tax evasion. Here, they specifically mentioned the use of cryptocurrencies in money laundering. The participating countries are currently working on a proposal to be discussed at the next gathering in Japan before the final version is adopted in 2020.
Though there is plenty of time, the idea that all the world’s leading countries want to tax the crypto transactions does not help at least on the digital coins.
Still, the BTC/USD found some support close to $ 3,655 – 3,700. At the moment, the main cryptocurrency is traded in a range between $ 3500- $ 4500. Unless we see approval of Bitcoin ETFs by SEC till the end of December or some another big news does not hit the market, Bitcoin is likely to remain in this range of consolidation. Positive news or inflows from institutional investors may also temporarily change the course of price action. In my opinion, there may be some fundamental support for Bitcoin and the price to recover over $ 4,000 at the end of the month.
Technically, Bitcoin Cash ABC fell yesterday by another 5.96% after dropping 7.28% on Monday to $ 147.07. For the day ahead, a clear break below the bottom of yesterday at $ 147.07 will support the rally to the morning high at $ 148.82. The $ 150 level can also be put in the game before any pullback comes in. But the main intraday resistance is the $ 160 level (top of Tuesday). In order to test this level, market sentiments will have to improve substantially.
On the downside, the Bitcoin Cash ABC’s first support and goal for the bears is $ 135 region. The next support area will be around the psychological levels of $ 130-125.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.