Bitcoin Falls Below $10,000: Is It a Usual Correction?

Coinspeaker
Bitcoin Falls Below $10,000: Is It a Usual Correction?

Even though Bitcoin (BTC) was pretty much bullish last few weeks, overreaching $12,000 several times, the correction, as sad as it sounds, had to happen. The number one cryptocurrency last traded below $10,000 on July 31., and at the time of writing it fell 7.6% to $9,796.00.

There are plenty of reasons for this cragged behavior. When the bulls are taking the wheel, everybody’s talking how Bitcoin is rising thanks to the China-U.S. growing tensions, and when the bears take over – everybody blames the same tensions and its repercussions.

Two weeks ago, Galaxy Digital CEO Mike Novogratz compared the rise of a Bitcoin with a price of yuan saying:

Co-founder of market research firm DataTrek Research Nicholas Colas commented on the fact that traders both in Hong Kong and Argentina have been using Bitcoin as a safe haven asset for a long time now. Also, former executive director at Deutsche Bank Peter Tchir confirmed in his article that Bitcoin is a main indicator of hidden geopolitical tensions.

Now, crypto traders are getting divided into three main groups regarding Bitcoin price predictions.

The bearish ones think Bitcoin will slide even further to $8,500–$7,500.

The second group is a little bit more objective saying Bitcoin will consolidate between $9,000 and $12,000 just before its rewards halving in 2020.

The most optimistic group still believe that Bitcoin will rally to its year high that is going to be around $20,000 in about a month.

To be realistic, we should stick to the fact. The truth is that BTC is most likely to bounce in the $9,900 region because this is where the 0.786 Fibonacci Retracement and 1.6 times the 350-day moving average sits so this region could act as a strong bounce zone.

In his recent analysis, Mati Greenspan, senior market analyst at brokerage eToro, wrote that once again Bitcoin is searching for support and having troubles with finding it. He discussed whether this fall is connected with China’s yuan recovery or problems in Argentina.

Greenspan added:

“Bitcoin and cryptocurrency volumes are back to normal today throughout the market but the price seems to be gradually falling. Many analysts have been doing their best to tie in the latest moves in the crypto market to the uncertainty in geopolitics but it’s difficult to say exactly how much connection there really is.”

But it’s not just a Bitcoin but the overall crypto market that feels a slump. Bitcoin Cash lost more than 10% while Ethereum, Ripple’s XRP, and Litecoin, all fell, less or more, around 10%.

Chief executive of Euro Pacific Capital Group, Peter Schiff, commented that the latest crypto drop is a result of recent buyers cashing out of the market.

What actually happened is the slowest growth for Chinese industrial output in the last 17 years, suggesting tariffs are influencing demand.

Last week, China got the yuan to break through the key 7-per-dollar level for the first time since 2008, and that concurred with a 7% gain for Bitcoin and a 9% rise in cryptocurrencies’ market capitalization, leading to speculations that Chinese traders are selling the yuan in order to buy crypto.

PlusToken Scam May Be a Reason of BTC Slump

Chinese venture capitalist, Dovey Wan, explains that this sell-off might be a result of a Ponzi scheme.

In her tweet, she claims that PlusToken, a Chinese seeming pyramid scheme, managed to make away with over 200,000 BTC and over 800,000 Ethereum.

Wan believes that those individuals created a fake wallet with a “high yield investment return” that ended with fake 10 million investors sending capital to the platform.

According to a police report, the known addresses of PlusToken, which span multiple blockchains, contain billions of dollars worth of cryptocurrency. However, not all were jailed and some of them allegedly still have the keys. Wan claims security auditing firm Peckshield discovered that more than 1,000 Bitcoin has been recently sent to Huobi and Bittrex from PlusToken’s known accounts.

Bitcoin Falls Below $10,000: Is It a Usual Correction?

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