Bitcoin Dropped Nearly 17% On Regulatory News Pre Xmas
Once again, regulatory threats have hit the crypto king, Bitcoin. After forming a high of $16416 this week, the cryptocurrency came under a selling pressure as traders showed their reaction to South Korea’s news. The country is determined to curb the speculative market and it would take measures to stop and review various crypto-exchanges. The reality is that the market is way too overheated and no one wants the cryptocurrency popping on their door steps. However, this is surely not the first time that we have witnessed this kind of reaction in the Bitcoin price. Throughout this year, we have heard many similar messages (followed by actions) from China and yet Bitcoin made a high of $19338.
The Cryptocurrency market is mainly driven by retail investors and they have the ultimate control in terms of the capital flow (at least for now). It is mainly touted that retail investors are not sophisticated clients but we all know that institutions or so-called sophisticated clients do create even more bigger blunders. So, it may be a bit unfair to think that if the currency is supported by retail clients it has no value and if it is supported by institutions than it has more value.
It may not be long before some employers give an option to their employees to get paid in Bitcoin. Of course, the capital gains part (if the bitcoin price continue to surge) is tax free and this would be highly attractive for many employees. Thus, the day this becomes main stream, the value of Bitcoin will become more eye-catching.
The below intra-day chart of Bitcoin shows that the December 22nd low remain as a major focal point and as long it this support holds, the path of least resistance remain to the upside. The price needs to break above the 50 day moving average (shown in green) to take the control from bears. As of now, bears control the balance.