Dramatic Dip in Bitcoin!
Bitcoin crashed and fell below the $54,000 level on Wednesday after the United States Securities and Exchange Commission announced a warning to investors regarding the risk associated with the first-ever cryptocurrency – Bitcoin. The traditional payment methods paused during the pandemic as the world stood still and helped the digital assets, including cryptocurrencies, to move at the forefront of finance. The digital asset was pushed forward like never before after the physical coin was shorted. The rising demand for digital coins led to a shortage of cryptocurrencies on exchanges like Coinbase Pro and elsewhere.
The real reason behind the shortage of cryptocurrencies at exchanges was the investors’ behavior to hold the asset even the prices were declining. After the sudden bitcoin fall below $50,000, investors are still reluctant to sell their positions, hoping that they will reach $100,000 or more this year. However, they could be wrong, and this was one of the major factors that the U.S. SEC warned investors to consider risk as Bitcoin was highly speculative carefully.
Meanwhile, an Australian computer scientist, Craig Wright, who alleges that he created bitcoin, launched a London High Court lawsuit against 16 software developers to secure 4 billion pounds worth of bitcoin that he claimed to be stolen from him.
The court has approved the attempt to legally sue a dozen developers working on Bitcoin, Bitcoin Cash, Bitcoin Cash ABC, and Bitcoin SV networks. The self-proclaimed Satoshi Nakamoto will go after the developers to make them recover over $4 billion of BTC supposedly stolen from his computer last year. This news added pressure on Bitcoin prices that remained below $54,000 on Wednesday.
Another reason behind the declining prices of Bitcoin could be the latest statement from the Chairman of the investment firm Bain Capital. Steve Pagliuca, the Chairman of Bain Capital, said that Bitcoin was hard to be seen as a viable currency yet. He added that the stability of the primary cryptocurrency was not satisfactory, and it has a long way to go to be trusted in lots of places.
These negative comments from the Chairman of an investment firm weighed on the Bitcoin prices and dragged them lower for the day.
On the flip side, a licensed crypto-to-cash exchange, Moneygram International Inc. and Coinme, announced on Wednesday the launch of a new partnership to enable the cash funding and payout of digital currency purchase and sale. It means Moneygram will start letting its customers buy and sell bitcoin at 12,000 locations in partnership with Coinme. It will expand the international market for the crypto king in the second half of 2021.
BTC/USD Intraday Technical Levels
Support Resistance
55617.6 57563.6
54784.3 58676.3
53671.6 59509.6
Pivot Point: 56730.3
BTC/USD - Technical Outlook
By the time of covering this update, the BTC/USD has plunged dramatically, falling from 52,635 level to 44,900 level. But soon after testing the 44,900 support level, the Bitcoin reversed to trade at 50,600 level. Right now, Bitcoin’s immediate resistance holds at 52,685 level, while the pair can gain support at 46,600 and 43,577 levels. Bitcoin has crossover below 20 and 50 periods EMA levels that demonstrate solid selling bias among investors on the daily timeframe. On Thursday, the investor’s focus will remain on the 56,750 area as below this, the bearish bias dominates. All the best!
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