Bitcoin slumps below $7,500 on Thursday following reports that Binance’s office in Shanghai has been closed by local authorities.
November 21, 2019 | AtoZ Markets – It was another bad day for the cryptocurrency market. Crypto prices fell in a massive combined $16 billion loss. All the top 50 cryptos listed on Coinmarketcap followed the bearish dive. The market has now lost about $40 billion in November. The combined market capitalization is about to hit $196.7 billion which was the lowest since June.
Bitcoin slumps below $7,500. What happened?
Meanwhile, the current sell-off has been attributed to reports that Chinese authorities have shut down Binance’s Shanghai office. According to theblockcrypto, there was a police raid on cryptocurrency-related businesses in the country and Binance was thus affected. Many of its executives and between 50-100 employees that worked in the office were reportedly worked out. The market reacted negatively to the news as 96 out of the top 100 cryptos listed on Coinmarketcap fell sharply. Bitcoin is now close to testing the $7,300 low recorded on October 23.
Top 5 performance summary
A quick look at the performance of the top 5 coins shows that losses of between 10% and 19% have been incurred in the last seven days. This has increased losses of the last 30 days to 7%, 8% and 18% for LTC, ETH and XRP respectively. In fact, BCH and BTC minor gains as of Wednesday have now been reduced to significant 2.6% and 6.5% setbacks respectively in the last 30days. However, Bitcoin still retains about 100% profit in 2019 YTD. It retains the top of the gainers’ table while Ripple is still rooted to the bottom.
Is Bitcoin a pump and dump scheme?
In just about two days between October 25 and 26, Bitcoin jumped from $7,400 to $10,500 (41% gain) (Bitfinex). However, in the next 26 days, the cryptocurrency has lost almost all of the profits. Situations like this usually give the Crypto bears solid points to hold on to. As a result, a Gold enthusiast Peter Schiff has, therefore, said that Bitcoin losing all of the late October jumps proves that it’s a pump-and-dump scheme. The Euro Pacific Capital CEO added that the gain in late October was pure manipulation. In a tweet, he wrote:
”Bitcoin spiked by 40% in less than 24 hours. Then in the ensuing 4 weeks, Bitcoin steadily lost 100% of those gains. This is a classic pump and dump. Run the price up to sucker in momentum buyers. Then sell into that demand. When will Bitcoin buyers wake up? You’re being played.’‘
Of course, in a bearish market like this, pessimism will drive in. However, the Bitcoin price is expected to surge once the bearish run ends. Many crypto bulls have predicted that the current downward run might hit $4,500 before the reward halving in 2020. In addition, the crypto halving is expected to usher a new wave of big rallies. Whether this will happen remains to be seen.
Bitcoin technical analysis: testing 61.8% Fibonacci retracement level
After the big bullish breakout from 3,100 ended at 13,900, Bitcoin price started a bearish correction that has now lasted for about 5 months. The price bounced off the 61.8% Fibonacci retracement level in late October. However, the sell-off resumed and now about to retest the 61.8% Fibonacci level which will most likely be breached this time around. Therefore, the bearish correction should continue to $5,000-6,000 support zone and if deeper, to $4,500. There is still some way to go before the much-expected resurgence begins.