Crypto Panic — Is it Real This Time?
Bitcoin’s wild swings continue. And they’re happening fast.
The world’s most popular cryptocurrency started the week on a rough note, falling 7% from $8,452 to $7,936 as of 4:00 p.m. EST Monday.
Today the coin sits at $7,885 as I write. Here’s the chart for the past week as of 11 a.m today:
Year to date is even more disheartening.
Bitcoin’s incredible fall from grace erased over 40% of its value since Jan. 1, as it fell from $13,412.
According to CNBC, the most recent sell-off is a result of news that Twitter will ban initial cryptocurrency offering (ICO) ads on its platform.
A Twitter spokesperson speaking to CNBC notes, “We have added a new policy for Twitter ads relating to cryptocurrency. Under this new policy, the advertisement of initial coin offerings (ICOs) and token sales will be prohibited globally.”
According to CoinDesk, the “bearish chart signals suggest a drop in prices is likely, though the four-hour, 50-period moving average (MA) has likely capped the downside around $8,200.
It looks like Bitcoin could hover and even drop below this current bottom for days, maybe weeks.
But what’s truly fascinating about bitcoin’s price action is that it’s actually nothing new.
This isn’t the first time ICOs have been banned from a major internet site. Facebook and Google both have recently revised their policies, banning ICO ads on their sites and platforms as well.
And this isn’t the first time general negative sentiment from the mainstream has caused bitcoin to drop in price.
According to our own crypto expert Rich Jacobs: “We’ve seen this phenomenon multiple times throughout the past two years in crypto. Crypto has lived through many downturns — some extremely severe, but most short-lived.”
The point is bitcoin always finds a way to bounce back and rip gains. Right now it just happens to be two-steps forward, one step back.
Cryptos don’t need Twitter and Facebook to exist. The intrigue is already there.
Many experts in the space note that we’re just seeing typical “cyclical market action” at an accelerated pace.
While attending the recent Bitcoin, Ethereum & Blockchain SuperConference, hosted by our very own Rich Jacobs, John McAfee noted the same:
“You need to stretch a crypto chart over a 2x magnitude and it mirrors equities… because transactions move faster (they’re compressed), meaning the up and downs happen quicker, i.e., look more volatile.”
And Rich notes a similar positive outlook on bitcoin’s recent price action:
“It’s important to keep in mind that early movers who bought many crypto tokens just a year ago and have held on haven’t given back their gains. By holding on and not panicking, or even buying on the dip, you have put yourself in a great position for when the market rallies.”
Rich’s takeaway on the current crypto market is clear and the one-year chart highlights this perfectly:
Tracking bitcoin right now is a fascinating exercise in how people conduct themselves in open markets. Since we know markets always, eventually bounce back…
The question is will you catch the next rip for amazing profits?
More on the state of Bitcoin to come in following issues.
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Managing Editor, Technology Profits Daily