by Steve St. Angelo, SRSRocco Report:
After another negative press release this morning, the major cryptocurrencies fell towards crucial support levels. According to a Zerohedge article, quoting CNBC, Japan’s chief regulator launched a probe of crypto-exchanges, prompting the largest to halt new account creation, thus sending the crypto market considerably lower.
The press release stated that Japan’s largest crypto-exchange, Bitflyer, needs to make improvements to its business model, especially in regards to anti-money laundering. While the press release had a negative impact on the crypto market, it will likely not be a big issue going forward. So, the cryptos may recover and shrug this newest downturn as just more FUD… Fear, Uncertainty, and Doubt.
Or, the crypto market could continue lower towards crucial support levels.
Today, Bitcoin fell 9%, to a low of $6,100:
Crypto investors need to understand that there aren’t too many assets that fall 9-10% in a day. However, Bitcoin is actually holding up better than the other cryptos. For example, Litecoin was down more than 13% today. For cryptos to be taken seriously, they cannot continue to experience this sort of daily trading volatility.
Now, some of the Crypto-Aficionados are saying that the cryptos are being manipulated by the POWERS-THAT-BE. Well, I thought one of the key reasons to own cryptos was due to them being decentralized… thus not subject to manipulation. However, all assets can be subject to manipulation, even by the “Whales” who control a large percentage of Bitcoin. So, manipulation can push prices higher or lower.
Regardless, it seems as if the crypto market will experience more selloffs in the future as the largest bubble in history continues to deflate.
I say this because even with the positive news releases on the crypto market, (SEC ruling that Ethereum was not a security), the crypto prices continue to trend lower. Thus, the negative press has more of negative impact on the crypto market than the positive news. We can see this taking place in the following charts.
I started warning about Bitcoin and the Cryptos late last year in my article, SELLING OUT OF PRECIOUS METALS & BUYING BITCOIN… A Very Bad Idea. At the time, Bitcoin was trading at $8,000, on its way to $19,000. Since its peak at the end of 2017, Bitcoin has fallen nearly 70%. Today, it fell to a low of $6,100, but the critical technical level is $6,000:
Bitcoin has fallen below its previous low of $6,468 on March 26th. The last time Bitcoin was trading below $6,100 was last year on Oct 16th. While $6,000 is the next key support level, the important psychological level will be $5,000. If Bitcoin falls below $5,000, it could head back towards $3,000 quite quickly. Not only would this be bad news for Bitcoin HODLers, but it would also be detrimental for the Bitcoin miners.
However, it is possible that Bitcoin could shrug off this bad news and move higher for a while. But, I doubt this would last long as the overall trend seems to be lower.
Now, even though Ethereum is experiencing a big selloff today, it has a bit more breathing room to reach its next key support level. Etheruem is now trading down 11% at $470, but needs to drop below $400 to puncture its key support level:
As we can see in the chart, the Ethereum price touched $400 three different times. Well, the price was actually $360, but I am just using $400 as a key psychological support level. If Ethereum falls below $360-$400, then its next significant level would be $200.
The third crypto that is very close to a critical support level is Litecoin. At it’s low today, Litecoin fell by more than 13% to $83. This is extremely bad news as Litecoin’s key support level is $80;
Litecoin is closer to its key support area that Bitcoin or Ethereum. Currently, Litecoin is down 72% from its high of $300. If Litecoin falls below $80, then it could quickly fall to its next support level of $50. But, as I stated, nothing goes down in a straight line. So, the entire crypto market could experience a correction higher for a while.