Almost every aspect of the cryptocurrency market now resembles the concept of 'house of cards'. The meaning of this expression is that if you draw one card, everything else collapses. And the same thing is now happening in the cryptocurrency market. After Bitcoin started to fall in price, all other cryptocurrencies also began to fall in price, although a couple of weeks ago, the "altcoin season" was being discussed with might and main. But as it turned out, as soon as the sales began, everyone immediately began to sell ether, litecoin, and other alternative tokens. The same goes for investors. As soon as the coins were sold off conditionally by Elon Musk (-10% for bitcoin from Tesla), other companies and institutions immediately began to reduce their investments in digital gold, except for MicroStrategy, which seems to be going to own bitcoin in proud solitude. The same goes for the fundamental background. As soon as the negative news from China began to arrive, they immediately began to provoke the appearance of new equally negative news. For example, this weekend, the Chinese cryptocurrency exchange Huobi announced the suspension and even curtailment of a number of areas of its activities and services for investors. It is not surprising if the Chinese authorities have begun to prohibit financial organizations from providing any services related to bitcoin, and in the near future they may even ban mining. Recall that in China, there are not only a lot of mining farms, but also a huge number of exchanges. It is clear that miners will find a way to mine cryptocurrency outside of China, but exchanges will have a hard time. There are plenty of places where you can place mining equipment on the ground. The problem is that bitcoin reacted to this news with a collapse. And the less it costs, the less profitable it is to mine it. Especially considering the increased prices for mining equipment over the past year. So, the fundamental background is not just bad at the moment, it continues to deteriorate. In the near future, we can expect some more surprises. Of course, it will not be without a new batch of forecasts that bitcoin "is about to rise in price to $100,000". But we are very realistic and do not own hundreds and thousands of bitcoin coins. Therefore, we believe that, at least, a long period of consolidation of the cryptocurrency begins. As a maximum, the collapse of the entire cryptocurrency market will continue.
Technically, Bitcoin fell to two important support levels on the 4-hour timeframe. The upward movement was very short-lived and now we recommend traders to monitor the behavior of bitcoin around the level of $30,500 and $29,873. If the price breaks these levels, then Bitcoin may continue its collapse.
The material has been provided by InstaForex Company - www.instaforex.com