It was not a great day for the cryptocurrency markets as all the major digital currencies experienced a big investor sell off.
Bitcoin hit its lowest price in over six weeks on Wednesday, falling 9% at one point during the day, crashing far beyond the key $8k barrier. Despite a late rally just before Asian markets opened, Bitcoin (BTC) is currently down 7.03%, with the world’s most valuable digital currency trading at $7529.9.
Weighing on Bitcoin and other crypto currencies is the increasing threat of regulation, especially from the SEC in the US. Recent crypto news has been awash with talk of the SEC clamping down further on scam ICOs and pushing forward the notion that cryptocurrencies should be treated and regulated as commodities instead of actual currencies.
The heavy declines today saw Ethereum plunge over 13% in intraday trading, before staging a slight comeback to be 10.27% lower at time of writing. Elsewhere, Ripple sank nearly 12% before staging the strongest of comebacks amongst the cryptocurrencies and is currently only 6.36% lower. The other big loser today was IOTA which plummeted 15.15% before rallying a little to be 12.52% lower at time of writing.
Traders were fleeing cryptocurrencies in droves, but the same sell off was also seen in the commodity and stock markets. A general risk off attitude amongst traders has been fuelled by talk of a trade war between the US and China and geopolitical tensions in Iran, the world’s fourth largest oil producer.
The big falls saw some of the most known and best crypto exchanges suspend withdrawals, most notably OKex. The Hong Kong based exchange that was founded in 2014, announced on their website that the suspension of withdrawals was due to a bug they needed to fix which was affecting account balances.
Worrying for crypto investors are the technical charts. An important long term trend indicator is looking more and more bearish. the five month moving average has rolled over in favour of the bears and investors are now looking at having to reduce the 10 month moving average. What this will result in, is a bearish crossover which has not been seen for almost exactly four years.
Whilst there is no clear direction or price points, highlighted by Wednesday’s late rally as the North American trading session was closed, there clearly needs a spark which can push Bitcoin above $8600 and Ripple beyond the $1 price. However, at the moment, the bears are firmly in control of the crypto markets with no sign of giving up control just yet.