Bitcoin has had a good run since I last wrote about it back in late July. However, somebody decided to smack it down hard today. It was at one point down 20%, but bounced back to a 10% drop on the day. The bounce happened at the 200 day moving average, and it's currently holding onto its 50 day moving average, as can be seen in this chart.
Once again, we see that technical support lines play an important role in large moves. Whales take advantage of the fact that Bitcoin is a speculative bet where technical considerations play an important role in decision making. They drive the price down to preselected levels where they load up for the bounce back to another preselected level, as we have seen happen today.
What's extra concerning to anyone invested in Bitcoin is that today's big move happened on a relatively small volume. Not only that, search interest for Bitcoin remains low. Whatever money changed hands today happened inside the Bitcoin community. For all the headlines about Bitcoin adaption, there doesn't seem to be any increased interest in it. Which means that the fundamental issue of energy cost is going to continue its downward pressure on Bitcoin.
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| Whale |
By Michaël CATANZARITI - by Michaël CATANZARITI, CC BY-SA 3.0, Link
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