The bears are still in control of the cryptocurrency markets.
The sell-off, which started over the last two weeks, has continued to wipe out nearly $50 billion of value. All thanks must go to the U.S. SEC decision to delay a Bitcoin ETF.
But the pullback does seem stretched after a drop from nearly $8,500 to $6,169.
In fact, the coin now sits at double bottom support dating back to early July 2018. If that line in the sand can hold, we could at least see some relief. The time for concern is when the coin breaks $5,519 support from November 2017.
We don’t think things will get that bad, though.
Most of what we’re seeing in the trading pits is nothing more than an overreaction.
Even though the U.S. SEC never denied a proposal for a Bitcoin ETF, some took the news as a preemptive sign of what’s to come. Pantera Capital CEO Dan Morehead views the latest action as an “overreaction.” Even the CEO will tell you the market often overreacts to news.
“In the last three or four business days, we’ve had two pieces of news. The ETF being rejected for the fifth time—that doesn’t seem very interesting to me. But on Friday, the parent company of the New York Stock Exchange, which also owns $42 billion of other exchanges, launched a cryptocurrency exchange called Bakkt. That is huge news. That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on,” the CEO told CNBC.
The Bakkt Cryptocurrency Platform
Instead of focusing on the short-term “noise,” traders should instead focus on the long-term opportunity. For example, the Intercontinental Exchange (ICE) intends to form a new cryptocurrency platform, called Bakkt.
Its intention is to create an “open and regulated, global ecosystem for digital assets.”
The new company is expected to work with organizations, such as BCG, Microsoft, Starbucks and others to come up with an integrated platform to ease the trading, storing, and spending of digital assets. Meanwhile, it could also boost digital assets like Bitcoin, as it eases volatility.
Then, as the project matures, there’s hope to create a “scalable on-ramp for institutional, merchant, and consumer participation.”
“This is huge news… This will have a very profound impact over the next five or ten years for the markets and in my mind, that’s what people should be focused on,” notes the Pantera CEO.
In fact, it may just be the biggest news of the year.
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