Bitcoin bulls went berserk yesterday, driving the price up by a 10% gain in less than an hour. BTC soared above the $10,500 resistance area and even tested $10,800 before beginning to correct downwards. At press time, bitcoin is trading above $10,300 but analysts believe that more losses should be expected if the price does not rally past the $10,800 resistance level.
In fact, popular analyst and trader Josh Rager commented on recent upswing suggesting that until the price hammers $10,950, the bearish bias remains. “Strong move today but the candle closed under both daily resistance and the monthly open (from July 1st) resistance. Notice how this area previously supported but now flipped resistance. This is the first level that BTC needs to reclaim for bullish continuation,” Josh summarized.
So, what is spurring this bearish outlook?
Increased Regulation By The US Government
Notably, bitcoin is a very volatile asset, just like all other digital cryptocurrencies. Therefore it wouldn’t come as a surprise if this wild volatility drove the prices down to 4-digits again. However, bitcoin, Libra and cryptocurrencies, in general, have been drawing a lot of attention, predominantly negative, from lawmakers, politicians, and regulators all over the world lately.
Actually, just yesterday, the US Treasury Secretary warned the bitcoin community that the government was intending on imposing “very, very strict regulations” on bitcoin and other cryptocurrencies. It’s not news that this kind of scrutiny weighs heavily on bitcoin’s price as such regulations tend to spook investors.
CFTC Probe On BitMEX Exchange
According to a report by Bloomberg, the US Commodity Futures Trading Commission (CFTC) is investigating BitMEX, a Seychelles-based cryptocurrency exchange over the claim that it was allowing US traders on its platform, therefore breaking jurisdiction laws.
After this news broke, the price of bitcoin plummeted by $500 within a few minutes even though neither CFTC nor BitMEX has provided further details about this ongoing investigation. To the bitcoin community, this CFTC investigation is likely to magnify investors’ worst nightmare: increased government regulation.
It’s Not All Gloom And Doom For Bitcoin
Bitcoin has hit a very important milestone following a recent recognition in China. On July, 18th 2019, the Hangzhou Internet Court, the second court so far, legally recognized bitcoin as a “virtual property” as publicized by Dovey Wan, a crypto-analyst-cum-investor. This implies that hereafter, bitcoin will be protected by the Civil Laws of China. Dovey went ahead to provide a link to the coverage by a local media house.
Dovey pointed out this great progress for bitcoin tweeting, “This case is a major milestone that manifested BITCOIN IS ACTUALLY LEGAL in China so please STFUDup on Bitcoin is illegal in China from now on.” It’s very monumental for bitcoin because for the longest time ever, China had imposed a ban on trading bitcoin by its residents.
However, China’s stance on Facebook’s cryptocurrency, Libra, is unfriendly, even recently prompting the Peoples’ Bank of China (PBoC) to develop its own digital currency to counteract Libra.