In a paper, the Federal Reserve of San Francisco said that the Bitcoin collapse from 20,000 on December 2017 was caused by the launch of Bitcoin in the US market as it allowed pessimists to enter to the market.
According to the San Francisco Fed, “the launch of bitcoin futures allowed pessimists to enter the market, which contributed to the reversal of the bitcoin price dynamics.”
The euphoria caused by the cryptocurrency entry to the US market spurred the rally to trade near 20,000; however, the opening allowed investors to go for a big short. “The rapid run-up and subsequent fall in the price after the introduction of futures does not appear to be a coincidence,”
On the other hand, it seems Wall Street is getting ready for the trading of the Bitcoin as the New York Stock Exchange has been working on a virtual platform to provide investors with the possibility to trade Bitcoins.
According to a news published by the New York Times, the parent company of the NYSE is warming up traders to be ready for Bitcoin. IN the same line, Goldman Sachs is also preparing its expansion on the cryptocurrency.
However, on the dark side, former Goldman Sachs President Gary Cohn affirmed on Tuesday that the Bitcoin would not be the global cryptocurrency that the world will use. Cohn stated that the dominant digital coin “will be a more easily understood cryptocurrency.”
Bitcoin breaks below the dynamic support
Bitcoin is trading Wednesday its fourth consecutive day with losses against the US dollar as the BTC/USD is trading 0.82% down on the day at 9,102.00.
In the last four days, BTC/USD fell 8%, or nearly $800, from May 6 high of 9,880 to today’s levels around 9,100. The cryptocurrency opened the day below the dynamic support that comes from April 25 and 26, and May 1 at 9,180.00.
If the cross breaks below yesterday’s low at 9,050.00, the crypto will test the 8,830, May 1 low, and 8,660, April 25 and 26 lows.
To the upside, the pair needs to break above the Wednesday opening price level at 9,180.00 before believing in a recovery. In the case, the break happens, next resistances will be at the 9,500 level, the 9,770.00 static resistance and then the 9,900.00 area. The 10,000 is a dream, at least for now.
Ethereum close Tuesday with a Bearish Spinning top; open with losses
The second cryptocurrency by market capitalization Ethereum closed Tuesday with a bearish Spinning top candlestick, and it opened Wednesday with further losses. ETH/USD is performing its fourth negative day in a row.
ETH/USD is currently trading 2.80% negative on the day as the pair is trading at 725.00. The cross is ready to break below yesterday’s lows at 720.00 and the crucial support at 710.00.
To the downside, if the pair turns back and falls below the 710.00 level, it will find next supports at 665.00, 640.00, and 600.00. Then, 557.00 is the most critical price down under.
To the upside, the pair needs to close above Tuesday high of 776.00 to confirm some bullish appetite. Then, the unit will see resistances at the 800.00 area, at 830.00, 900.00 and then the 1,000 significant mark.