Bitcoin's boom has a blip
29 October, 2020
Bitcoin’s latest rally lost steam on Wednesday amid widespread risk aversion, falling by the most in per month.
The world’s biggest cryptocurrency by market value slumped 3.1 % to $13,201 by 10.40pm UAE time on Wednesday night. Alternative coins including Litecoin and Monero also posted declines.
“This broad, risk-aversion-trading session is triggering widespread panic selling, which is seeing every risky asset, like gold and Bitcoin, really commence to plummet,” said Edward Moya, a senior market analyst at Oanda Corporation.
Wednesday’s high of $13,857 only narrowly exceeded Bitcoin’s latest peak, occur June 2019. Although some chartists say Bitcoin could be forming a bearish double-top pattern, it also could be going for a breather following its 14-day relative strength index reading passed 70, signifying the coin was overbought.
“I feel that $14,000 is an extremely key threshold,” said Moya. “Once that level is taken out, there is going to be much more upside here.”
Before Wednesday’s pause, Bitcoin had gained roughly 15 per cent since an announcement last week by PayPal that it will allow customers to use cryptocurrencies.
But Bitcoin advocates say the coin’s decline may not be cause for concern. Many argue cryptocurrencies - and Bitcoin specifically - could eventually stand to benefit within an era of rampant central-bank money printing and the prospect of an inflationary spike.
“The way we see it, something unexpected must reverse increasing adoption of Bitcoin as digital store-of-value such as gold, or the price has few options but to go up,” Mike McGlone, a strategist with Bloomberg Intelligence, wrote in a note.
Source: www.thenationalnews.com
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