Bitcoin (BTC) came into existence after the financial crisis of 2008 with a noble objective to reduce dependence on governments and banks that were responsible for the crisis and the bailouts that followed. The early supporters of Bitcoin (BTC) were those that truly believed in what it stood for. They did not care about the price of Bitcoin (BTC); they cared about the fact that it solves the double spending problem with fractional reserve banking as there will only be 21 million Bitcoin (BTC) in circulation. This was a noble cause but it was also a new technology which attracted the kind of people that wanted to profit off its novelty. Blockchain this, blockchain that soon we se saw a plethora of ‘blockchain projects’ come to surface with thousands of new coins flooding the market.
This aggravated the double spending problem that Bitcoin (BTC) was supposed to fix. We have Bitcoin, Bitcoin Cash, Bitcoin SV and so on just for Bitcoin alone. Then there is Ethereum (ETH), Litecoin (LTC), Ripple (XRP) and thousands of other altcoins. It would not be unreasonable to say that the cryptocurrency market is now in a similar position as the stock market was before the financial crisis of 2008. This is an unprecedented level of greed because people have put money in anything that had the term “blockchain” in its whitepaper. All this cannot go on for long. The weekly chart for BTC/USD shows that previously Bitcoin (BTC) has broken trend line supports which have then become trend line resistances. While that may still happen, this time BTC/USD would be falling below the 200-week moving average to do that.
The S&P 500 (SPX) has run into a key trend line support turned resistance for the first time since 2008.