We have been focused on the $5,800 to $8,200 range for some time now and Bitcoin is approaching that lower end of the range. In the past 24 hours, the total capitalization of all cryptocurrencies dropped $21 billion. After falling to $5,900, Bitcoin recovered to $6,112. This was the lowest level traded since June 18, when Bitcoin traded to $5,785. Last month Bitcoin traded to almost $8,200 on the back of news that suggested retailers would use the digital currency on outlets across America.
Looking at price action, volume and other technical factors, we at Classiarius feel that there was some stop loss selling as the market broke down. Keep in mind that last month`s move to above the 8,000 mark encouraged new longs to take hold in the market. We feel that many of those longs were liquidated today. But this sell-off today was not sudden as it was actually an extension of selling that took place with the SEC rejected – yet again – an exchange traded fund or ETF. ETFs track underlying assets, in this case cryptocurrencies
The question now is the 2nd half of 2018 – will cryptocurrencies make a come back? Right now, Bitcoin is 70 percent off its highs that tested in late 2017, when it traded to almost $20,000. Look for crypto prices on Classiarius.net. Note also that a recent Goldman report suggested that the short-term future for Bitcoin and alt-coins in general was not good. In the note it suggested that Bitcoin was not a store of capital nor met other standards that would make it a currency. These comments plus the ETF rejection both seem to be the drivers of today`s long (started a week ago), sell-off. Again our support target level is $5,800 – a break would be a disaster.