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Detour ahead.
After enjoying a bullish few weeks during which Bitcoin rode into five-figure heaven on the back of Libra bulls, Bitcoin has endured a rude awakening. Regulation was always going to be a prominent roadblock for Facebook. This was proven so after everyone with an ounce of authority and screen-time launched a barrage of attacks on the David Marcus-led project.
Over the past week, the Fed Reserve Chair, the Treasury Secretary, both the houses of the US Congress and even the President himself have leaned hard on Facebook. Although Libra is more than a year out from launching, Bitcoin has seen its price get stomped outright.
The bullish Bitcoin swing that began with Libra being unveiled, was undone in just a week. Libra took Bitcoin from $9,500 to a YTD high of over $13,000; not just once, but twice, a massive 40 percent pump. However, on the back of two hearings and a press briefing, the price dropped from $13,000 to $9,300, as the gains associated with Libra were wiped clean.
Libra was, and still could be, a catalyst for Bitcoin. Last month’s price rise was a testament to the same, and this week’s price drop attests the close relationship between the centralized digital asset and the decentralized king of cryptocurrencies. The reach and customer base of Facebook, coupled with its well-established messaging services Whatsapp and Messenger, and its native blockchain and wallet, Calibra, will create a organised structure of a cryptocurrency and will be more inviting than the unorganized Bitcoin, which many skeptics still fear from the days of its use in illegal markets.
Alex Kruger, popular cryptocurrency analyst, attested to this ‘reversal’ and charted out the price roller-coaster.
Source: Twitter
The collective market cap dropped below $260 billion at press time, while Bitcoin dropped under $9,500, experiencing a 15 percent drop over the day. Given the current setting and the regulatory attacks against Libra, and by extension the Bitcoin market, the market is struggling to hold on to its gains.
According to Josh Rager, another popular cryptocurrency analyst, the “market structure” of the Bitcoin market has been “broken,” and lower price drops will be seen on higher time frames, which would indicate a prolonged downward movement. However, Rager stated that “smaller bounces” may be present between the “lows.” The short term trend however, in his opinion, has “changed.”
The imminent pullback could last 3-5 weeks, he said.
He tweeted,
$BTC Daily Close
Market structure is broken and lower-lows have been set on higher time frames
There will be smaller bounces in between, but it looks like the trend has changed folks – for the short term
The avg pullback last bull market lasted 3 to 5 weeks before continuation pic.twitter.com/JzcfqIwyMR
— Josh Rager 📈 (@Josh_Rager) July 17, 2019
There is some truth in ringing the alarm bells here, as Bitcoin dropped below the $10,000 mark over conceivable criticism of a “cryptocurrency” in Libra, and not some isolated sell-order or the opinions of any influential naysayer. In fact, this points to a real Facebook-induced problem for the king coin. With yet another hearing before the House Financial Services Committee nearing, the price is anticipated to fall even further.