Analysis

Can Bitcoin Price Hold $6000 Support

Bitcoin is testing $6000 price mark again, a new low of 2018, since news reports started pouring in about another crypto exchange hack and Bitcoin price manipulation investigation reports. According to reports, hackers have stolen $31 million worth of cryptocurrencies from Bithumb crypto exchange. On top of that, recent investigation by US Justice Department’s Commodity Futures Trading Commission confirm how easily cryptocurrencies markets can be manipulated.

Bitcoin bears have been in control for far too long these past few months. Some investors in the crypto community actually think that CME or CBOE Bitcoin Futures had something to do with it, or an exchange hack was behind this prolonged correction. However, the simple explanation to all these speculations is that the price was supposed to correct after such a big run. Professionals, who have been investing in other markets before cryptocurrencies, saw this coming. However, amateur investors who had no prior trading experience were alarmed by the big price drops and most of them panic sold.

This has two important implications. Firstly, the number of amateur investors looking to panic sell has decreased significantly. Most of those who wanted to get out have already done so. Bitcoin is down 70% from all time high. The number of potential “panic sellers” at this point is negligible. However, same is the case with the number of new retail buyers. Why is that? That is because most of the buyers were first time buyers who bought near the top around $17,000 to $19,000 levels. When the correction began, most of them sold at 40 to 50 percent losses, some even more than that.

Bitcoin price analysis
Bitcoin USD Analysis June 2018

This means that most of those buyers are now looking to get back the same number of coins that they lost. The only way they can do that is if Bitcoin price comes down to $3,000 or $2,000 levels. This explains the prevalent negative sentiment in the market right now. Institutional investors do not buy on exchanges and the investors who buy on exchanges (retail) are expecting the price to fall further out of their own vested interests. Those who did not sell are still holding.

So, what is going to happen next? Well, the price will test $6,000 and then continue to trade sideways for a while until a catalyst pumps it up. At that point, those retail investors looking to get their coins back will FOMO in, again at higher prices and Bitcoin price will continue to rise towards new highs.

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This article is published with analysis contributed by Fakhan

Disclaimer: Cryptocurrencies investments are full of speculative and market risks. This article is only for information purposes and not an investment advice. Please conduct your own thorough research before investing.

Bryan

Bryan is an avid news reader and a crypto investor. You will often find him busy researching about cryptocurrencies on a beach side.

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