Also known as the “December Effect”, the Santa rally refers to the market’s tendency to rise in the last five trading days of the year and the first two days of the new year. But Crypto-currencies are not enjoying any kind of Santa rally. Bitcoin, Ethereum, and Bitcoin Cash are all crashing quite significantly. This is not a small drop and is not limited to a specific coin, but seems like a wider sell-off. The leading coin, bitcoin, is not immune to the fall and stalled before making the big leap towards $20,000. Here are updates on 5 cryptocurrencies:
- BTC/USD is down by over 10% to $14,088, already around 30% below the magic number of $20,000.
- ETH/USD, which was well above $800, is currently trading around $778, down some 15% on the day. Ethereum has more to offer in comparison to bitcoin but offers also bigger losses today.
- BCH/USD, or bitcoin cash, is down a whopping 21% to $2,435. The coin, which exists only since August, enjoyed a big leap earlier in the week as it received inclusion in a key exchange.
- XRP/USD: Ripple initially held its ground but then fell quite sharply as well, some 18% to $0.93.
- LTC/USD: Litecoin is down some 23% and trades at $234. The peak so far was $370 that was seen a few days ago.
Here is the Daily BTCUSD chart, with support and resistence lines :
BTC/USD support lines
If BTC/USD fails to hold onto $13,313, the next line of support is at $11,353. The price stalled at this point before making the big leap towards $20,000. The round level of $10,000 is clearly of high psychological importance, but real technical support awaits only at $8,183. BTCUSD was unable to break above this level during long days in late November. After the breakout, a correction sent it to test this line. It did not break lower, and then continued to much higher ground. The last line for now is $5,400. This is a line of support from mid-November, but may be too far out for now.
BTC/USD resistance lines
If the battle over $13,313 is won to the upside, there is a lot of room there. $16,483 may serve as a temporary cap, but a clearer line of resistance is $18,443. This level capped the digital currency last week. The ultimate level of resistance is $20,000, just above the peak of $19,964. It is also a round number, magnifying its significance.
Why are crypto-currencies crashing?
- Coinbase was down: During the Asian session, a key exchange, Coinbase, suspended buying and selling of bitcoin and other cryptocurrencies. This is not the first time they experience an outage. While the issue has since been resolved, it shows that trading is vulnerable, and this, in turn, affects the price.
- Chinese crackdown: A new report in the media in Hong Kong discusses the Chinese clampdown and how it raises demand for over-the-counter trading. Yet this may not last for too long.
- Ability to go short: The introduction of futures on bitcoin by the CME group on Monday. While going short on bitcoin via options could work as a good hedge and allow further buying of the digital currencies, it also works as a short on its own, putting pressure on the price.
- Founders are selling: Emil Oldenburg sold all his bitcoins and switched to bitcoin cash. Litecoin founder Charlie Lee sold all his LTC assets and donated the money.
- Goldman Sachs is jumping in: The “vampire squid” took a decision to build cryptocurrency trading desk. It could be up and running in June. There are a lot of open questions about to manage it. In theory, this should add another notion of normalization. However, once again, making it mainstream also allows going short.
Many skeptics of the virtual currency, which operates with no government or company in charge, have predicted that it was in bubble territory and due for a collapse. Still, the drop to around $12,000 a Bitcoin from around $17,500 was enough to set off a panic among buyers, even while stock market investors remained calm and much of the world, unaware that Bitcoin exists, was oblivious to the uproar.
On Reddit, the online forum visited by many Bitcoin followers, people posted phone numbers for suicide hotlines for bereft investors. A popular service that sells Bitcoin to many individual investors went down, overwhelmed by orders. “If someone is depressed by the sudden drop in price, remember that many of us are going through the same thing.”
In its announcement on December 27, the government in South Korea threatened to close down cryptocurrency exchanges and banned anonymous trading accounts. These moves follow earlier measures of banning ICOs and ensuring Korean domicile for investors opening accounts in cryptocurrency exchanges. It has also fined Bithumb, the country’s largest cryptocurrency exchange, for a June 2017 hack.
New analysis of technical charts suggests that bitcoin could fall below 8,000. As happened this fall, bitcoin's drop could merely be a short-term pullback before more huge gains - or it could be the first leg of a drastic decline for the cryptocurrency.
Who is Erik Finman, the Bitcoin Millionaire Teenager?
Erik Finman has not followed the traditional path of college-bound students growing up in the United States. In May of 2011, at the age of 12, Finman struck a deal with his parents to be able to skip college in pursuit of an unorthodox education, provided he could invest successfully. The deal? He had to turn $1,000 in cash that his grandmother gave him into an impressive $1 million. Finman pursued his goal relentlessly and managed to succeed, purchasing about $1,000 worth of Bitcoin when the fledgling currency was at just $12 per coin, as well as a number of other digital currencies including Ether, Ethereum’s native token. Finman was successful in his goals, making him a self-made millionare at the age of 18. However, he remains skeptical about the future potential of Ethereum.
Read more: Who is Erik Finman, the Bitcoin Millionaire Teenager? | Investopedia https://www.investopedia.com/news/who-erik-finman-bitcoin-millionaire-teenager/#ixzz52lk9POJ8
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North Korean hackers are hijacking computers to mine cryptocurrencies as the regime in Pyongyang widens its hunt for cash under tougher international sanctions. A hacking unit called Andariel seized a server at a South Korean company in the summer of 2017 and used it to mine about 70 Monero coins -- worth about $25,000 as of Dec. 29 -- according to Kwak Kyoung-ju, who leads a hacking analysis team at the South Korean government-backed Financial Security Institute.