After showing the bears some resolute determinism this week, the bulls have been caught by surprise just an hour ago as Bitcoin price slipped by 5%, on the day losing 10% from around USD 8,252 to its current low of USD 7,435 at 2:50 pm London (CoinDesk). This is a new five-month low for Bitcoin.
There does not seem to be any apparent reason, other than weak short term fundamentals and general bearishness all around in technical analysis, compounded perhaps a by a long forming death cross for Bitcoin taking place the whole of this month. Yesterday’s gains have all been wiped out.
Data aggregation site Rekto has said, though, that over USD 205 million in XBT Perpetual Swap contracts were liquidated on BitMEX — the Bitcoin market on that exchange. This means that BitMEX’s system has closed a huge number of Bitcoin leveraged positions, and as one of the world’s largest trading volume places for Bitcoin, it isn’t unfamiliar to see BitMEX data correlate with crashes and surges for Bitcoin.
A sea of red is now taking place across the crypto market, with altcoins no better able to fend off the selling pressure. In the Top 20 altcoins, Bitcoin SV is the worst performer, losing 14.4% on the day, while close behind are Lisk (-13.5%), Litecoin (-10.3%) and XLM (-10.5%).
Ethereum will perhaps be the one concerned over its footing, having thought to have crested towards USD 180 earlier, only to low slip below USD 160.
Notwithstanding price action, the latest US politician to have come out strongly in favor of Bitcoin is North Carolina representative and Congressman Patrick McHenry, who calls Bitcoin one of “very real, very important projects” that are in nascent stages of innovation.
He did note that Bitcoin use case in the real world was still far outside the financial inthat are still in the early stage of innovation. He noted that bitcoin’s real use case remains outside the grasp of financial industry, saying that nobody can predict which way the cryptocurrency would go in the next 20 years.
He asserted: “Nevertheless, it would be of enormous value and utility.”
Congressman Patrick McHenry reintroduces the Financial Services Innovation Act to create entrepreneurial regulatory sandboxes. He describes how it would affect ICOs and the BitLicense. Plus, we discuss what could best compete against a Chinese digital yuan https://t.co/hK6pc7n2gu
— Laura Shin (@laurashin) October 22, 2019
The host, journalist Laura Shin, asked about how the United States would get into competition with China should it launched its rumored digital yuan. The criticism, it seems was that while China was a treasure trove of crypto and blockchain startups, it had yet to come up with a useful regulatory sandbox, unlike other so-called blockchain destinations like the UK or even its neighbor South Korea.
TechCrunch founder Michael Arrington, also a manager of a dedicated crypto fund, had in 2018 slammed US’s harsh regulatory and visa regime for being responsible for the brain drain to other tech-friendly jurisdictions like Israel and Singapore.
Libra even crept into the discussions, with Shin warning that the US would fall farther behind if the yuan became a de facto global currency, as said by RBC analysts Mark Mahaney and Zachary Schwartzman. Congressman McHenry said:
“A digitized US dollar is a reasonable next step from our central banks… We are looking into whether or not the Federal Reserve has the legal capacity currently to issue digital currencies. If they do not have a legal authority, I would support the legislation so that the Federal Reserve have that capacity.”
McHenry said that the Financial Services Innovation Act would have to be reintroduced, saying also that crypto development underscored how apparent Bitcoin’s vast value was. He warned regulators to act quickly to keep pace with innovation:
“My conclusion was, any action by the government — really up until the last 2, 3 years — would be negative, would impair innovation and would restrict the development of cryptocurrencies and their enormous value, now and in the future.”
Today and right now, Facebook CEO Mark Zuckerberg is testifying before the House Financial Services Committee on Facebook’s crypto project, Libra. The much-maligned stablecoin has been weathering a harsh storm of criticism from US regulators after Chairwoman of the committee Maxine Waters called for a moratorium on its development, and forcing Zuckerberg himself to admit that it would be long delayed. Waters, in her opening remarks, said it was best:
“…if Facebook concentrates on addressing existing deficiencies and issues before proceeding with Libra.”
Could an unexpected sliver of hope for Libra come out today and perhaps boost Bitcoin price?
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