The signs were there, the bears would have said yesterday, and they will surely be taking the chance today to remind everyone how right they were as Bitcoin finally breached the psychological support line at USD 10,000.
Now trading around USD 9,850, the fall has also sent jitters throughout the rest of the crypto market, with all major altcoins losing ground over the price slide, halting the upwards trajectory of Ether and Ripple. Ether is now trading at around USD 204 while Ripple (XRP) has slid below $0.30 again (CoinDesk).
Price change 1-Hour -0.18% | 1-Day -3.42% | 1-Week -2.18%
9/19/2019 8:13 AM
— Trading Strategist (@TradeStrategyCo) September 19, 2019
It is, as usual, difficult to pinpoint a particular reason for why this happened, other than the very reasonable cycle of profit taking that typically has been taking place every time Bitcoin price enjoys a mini revival.
In Hong Kong, venture capitalists CMCC Global launched a new Liberty Bitcoin Fund that caters to Asian accredited investors who wanted a legitimate way to invest into Bitcoin without buying it directly, as they were interested but still wary about the currency.
While Bitcoin purists will insist the only way to truly own the digital asset is to actually control the private keys assigned to a particular wallet, traditional investors continue to trust funds like this new one, that in reality is a single-asset passive tracker of Bitcoin. It does also offer services including buying and safekeeping coins. A managing partner reveals:
“We have received more and more questions over the years from our existing investor base about whether we could help them buy Bitcoin. The new fund is really a demand-driven.”
That should have been bullish for Bitcoin in the Far East, but perhaps the more eye-catching headline is North Korea’s admission to VICE magazine that the military regime was considering building its own version of Bitcoin.
NEW: North Korea is building its own bitcoin https://t.co/IsjTXWIurq
— VICE News (@vicenews) September 18, 2019
In April, it brought in experts from the outside world to convene with local scientists at its first ever crypto and blockchain conference. While there are no details as of yet, the crypto they are building will be quite similar to Bitcoin. This according to Alejandro Cao de Benos, the official responsible for North Korea’s cryptocurrency conferences, and who is a special delegate for the Committee for Cultural Relations for the Democratic People’s Republic of Korea (DPRK). De Benos said:
“We are still in the very early stages in the creation of the token. Now we are in the phase of studying the goods that will give value to it… [there are] no plans to digitize the [North Korean] won for now.”
It’s hard to see how this news could affect price, however, as this is hardly the first time the nation in question has professed its crypto ambitions, even if embassy and other direct state officials have not given comment on the matter. They have long been in the headlines for alleged cryptojacking activities since at least 2017. London think tank Royal United Services Institute’s analyst Kayla Izenman believes that there is “absolutely no doubt” that North Korea is in possession of the technical expertise to build and use any kind of crypto. Izenman also says they will use any means at their disposal to achieve this:
“…whether that means laundering a previously-established coin such as Bitcoin through foreign unregulated exchanges or creating a nationalized cryptocurrency for themselves.”
Associated Press reported in August that a UN report found evidence that the North Korean state sanctioned and sponsored hackers to amass more than USD 2 billion in regular and digital currency in the past several years to help fund the state’s weapons program. Pyongyang has denied all of these allegations. Could this be a reason why the US Army is now interested in expertise to help them track crypto transactions on the blockchain?
Whatever the outcome of price direction this week, it does appear now that this regular cycling just below and above USD 10,000 has now happened so many times in the last few weeks and months that consolidation believers are now gaining momentum in their convictions every cycle.
The strange thing about these kind of tight ranges is that they can strengthen moves in either direction. If it is indeed consolidation, as had last happened around February and March, then expect to see Bitcoin make great strides towards a new 2019 high, and then onwards to the all-time high near USD 20,000.
On the other hand, lower highs and a contraction of timeframes between each breach of important support lines could also signal a significant crash that could release all previous gains made this year.
Image Courtesy: Pixabay