In the last several hours bitcoin has lost a bit of momentum...
Bitcoin dropped from highs over $10,500 to lows around $10,100 and it did so in a matter of minutes.
Interestingly enough, the price didn't stay there for long as it shot right back up to $10,500 a few hours later.
Volatility has been the name of the game today:
Currently the price has drifted back down to around that $10,100 level...
What caused the dip?
Like every time there is a dip, there were more sellers than buyers of course. :)
Okay okay, beyond the obvious, it looks like the dip could be caused by one of two things...
At least from where I am sitting.
First, bitcoin seems to be moving along with the coronavirus data. As the data gets worse, bitcoin goes higher.
Which makes sense on many levels as a lot of the buying we have been seeing seems to be coming from the Asian part of the world.
Well, early today and late yesterday we saw some figures posted by China that seemed to indicate they were getting the coronavirus under control. The rate of infection seemed to be slowing dramatically.
Shortly after, bitcoin tanked.
However, not long after, those numbers were revised with a new reporting method being adopted, which showed the virus is not nearly contained to the levels previously thought, and bitcoin shot right back up again.
Though, going by that theory the price probably shouldn't have fallen right back down after it popped to $10,500 again like it did...
The second possibility has to do with Washington...
You know our friends that seem to hate all things crypto.
Well, late yesterday the Treasury Secretary made a statement saying they were going to release new regulations on crypto that would prevent it from becoming like Swiss numbered bank accounts.
More about that can be seen here:
This is exactly the kind of rhetoric that derailed the bitcoin rally back in June of 2019.
Is the same thing happening again now?
I sure hope not.
Whatever the reason for the selloff today, I expect further weakness in the coming days as many of the technical indicators are looking overbought and in a need of a breather.
After a bit of a pullback though I think we will be primed and ready to head higher once again.
I mean, as long as Washington doesn't dump cold water all over everything again.
Stay informed my friends.