Irrational Cryptocurrency Market Ignores Bullish News

Cryptocurrency prices slid again over the past week, with bitcoin dropping from $6,800 to $6,150, for a loss of around 10%. Bulls would like to see the price hold above $6,000 on this dip and then establish a higher low versus the previous day.

bitcoin price

If support around $6,150 fails, the price has stronger support at $5,800, where you can see a clear double bottom that occurred during June. Note that the red and orange downtrend lines are getting closer to the $5,800 support level. As those lines converge, we can expect a major breakout in the price.

bitcoin double bottom

I am a long-term holder and believer in the technology, its use cases and the inevitable increase in adoption. It is clear to me that it is a better form of money than fiat paper or centralized banker credit. It even has some advantages over gold and the launch of multiple gold-backed cryptocurrencies present the best of both worlds. So, I don’t mind the short-term volatility too much and simply add in small tranches on the dips.

But the crypto market has been acting very irrational lately. It has continued lower despite incredibly bullish news and positive catalysts that should be pushing prices much higher. I think all of this bullish news will act as fuel for the eventual fire that lights under crypto prices and pushes them to new highs. The more it falls on positive news, the more powerful the eventual breakout will be.

Reduced Regulatory Risk

One of the biggest news items last month was the SEC saying that it does not view Ethereum (or Bitcoin) as a security. I’ve always viewed regulatory risk as the biggest threat to the market, so this news was incredibly bullish in my view. More recently, South Korean cryptocurrency exchanges passed regulatory tests. Korea is a very important market to the crypto space and this announcement lends legitimacy, reduces risk and will lead to increased adoption in Korea.

Adding to the good news, it appears that the Indian government is not going to put a blanket ban on digital currencies, but rather treat them as commodities, an anonymous source in the government said. India is a nation of over 1.3 billion people and cryptocurrency is becoming very popular to citizens there.

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