Overnight, within merely hours, the valuation of the crypto market dropped by $28 billion as major assets in the likes of Ethereum and Litecoin fell in the range of 11 to 15 percent.
Analysts have largely attributed the correction to a technical move given the 200 percent year-to-date gain of bitcoin since January.
Market largely oversold, can it recover?
Global markets analyst Alex Krüger said on July 12 that while the medium to long term trend of bitcoin remains bullish, a drop in the price of bitcoin below $11,300, which has served as a key support level, could lead to a drop below $10,000.
“Mid/long term bullish; Short term bullish above 11500/11600, bearish below 11300; R: 11800, 12000, 12300, 12500; Key level above for bears to defend is 12300; if price moves below 11300, 10000-9650 is first larger target area. 50 DMA stands at 9760,” he said earlier this week.
At the time, Krüger cited the remark of U.S. President Donald Trump on bitcoin which dismissed cryptocurrencies as an asset class and condemned the development of Libra as potential short term bear signals.
“Many have interpreted Powell’s testimonies & Trump’s bitcoin remarks as short term bearish. The long-term impact could be seen as either bullish (awareness) or bearish (increased regulatory tail risk). Coupled with a lower high, the balance has shifted slightly to the downside,” Krüger noted.
Although the downside movement of bitcoin and the rest of the crypto market has seemingly been technical and many industry executives have considered the first remark on bitcoin by a sitting U.S. President as a positive indicator, President Trump’s dismissal of bitcoin could have fueled the dip.
I hate short term price predictions but fundamentals tell me #bitcoin should be at about $8k right now.