A Few Bad News Help Turn the Market from a Bull Run into a Bear
A few bits of bad news helped spur on a crypto correction that started when Bitcoin failed to break $10k. This included a rumor that the MtGox trustee had moved a 8,000 or so Bitcoin onto the exchanges, news of a raid on the popular South Korean exchange Upbit, and to a lesser extent the potential of regulation of ICOs in the US.
- The main thing that happened is a matter of price action and market cycles: Bitcoin went from $6k to nearly $10k in less than a month, alts and Ether ran just as hard if not harder, momentum started to slow in the high $9ks for BTC (especially alt momentum slowed at that point), RSI was in overbought territory across many cryptos, Bitcoin failed the psychological $10k, we saw an expected correction, it is crypto so that correction was deep, etc.
- However, this price action was accentuated by a string of bad bad news: First we heard Ether and ICOs might be securities and that there was an SEC meeting (this was announced during the bull run and was ignored at first, but the meeting happened to take place right after BTC failed $10k), the MtGox trustee is potentially still selling on the open market (this could be a rumor), and the on May 11th Upbit was raided (this seems real, but the details are sparse).
That should help anyone wondering what the heck is up with crypto this week, and especially today May 11th, to make some sense of it.
The thing I would say is this, the correction was harsh, but was somewhat expected, those who expect corrections like this do so because they expect prices to move in waves (especially in a volatile market like crypto).
Psychological levels like $10k and “the $6k double bottom” tend to work as resistance and support levels, and crypto tends to take the path of least resistance when it isn’t defying odds.