Tuesday, January 16, 2018

Bitcoin Price Breaks Below $12,000: UPDATE Now Below $11,000


In volatile trading, the bitcoin price has dropped under $12,000 this morning and is down more than 18% in the last 24 hours.

The immediate driver of the price break in the e-currency was overnight comments made by South Korea Finance Minister Kim Dong-yeon during a radio program interview where he said that "the shutdown of virtual currency exchanges is still one of the options" the government has, according to an English-language report Tuesday from South Korea's Yonhap News.

This falls in line with my warning that there are four potential threats to the bitcoin price:

1. Transaction processing difficulties

2. Government interference

3. A recession

4. Simply a natural exhaustion of buyers

I believe we are seeing factor 4, buying exhaustion, in play. Since bitcoin is merely a momentum play, with no fundamental factors holding the price up, you need constant strong no buying to push the price higher and that kind of strong buying is just not happening.

Factor 2, government interference is beginning to play an increasing role in the bitcoin price. In addition to the comments from the South Korean finance minister, China plans to block domestic access to Chinese and offshore e-currency platforms that allow centralized trading, according to a Bloomberg report.

The bitcoin price is now some 40% off its recent high of $19,343.

 -RW

UPDATE

The price of bitcoin has broken under $11,000 and is currently trading at $10, 565. It is down more than 24% in the last 24 hours.

4 comments:

  1. Wonderful buying opportunity.

    ReplyDelete
    Replies
    1. I'm sure that's what they said, when the prices on Beanie Babies tanked.

      Delete
  2. Libertarians should be celebrating bitcoin even if it is a form of fiat because, if it ever goes mainstream among the public, there is no way the government will get that cat back in the bag. And the USD is toast.

    ReplyDelete
  3. Bitcoin (BTC) was at USD$881 a year ago. How awful that it is only at $10,000 and change! Soooo awful!
    http://preev.com/btc/usd

    ReplyDelete