Bitcoin and other digital currencies crashed Thursday in Asian trading, a slide likely to raise concerns about the sustainability of the recent spike in cryptocurrencies. Bitcoin slumped as much as 8.7%, the most since early August after failing to make record highs.
Bitcoin has more than doubled this year and was close to the record high of $19,511 set in late 2017. Most of analysts signaled that conditions have been overbought since mid-November.
In this context, Jean-Charles Gand, Chief Technical Analyst at Market Securities, noted that “Bitcoin has stalled below the key resistance level of its December 2017 highs. A mean reverting move toward its 50-day moving average is in progress. For the record, the price was +2 standard deviations above the average since October 21st.”
In addition to technical patterns, potential profit taking, tighter regulation was also cited as a potential catalyst. Bitcoinist highlighted that “the Bitcoin market’s sell-off accelerated, particularly after Coinbase-fame Brian Armstrong warned about tighter crypto regulations in the US.”
Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I’m concerned that this would have unintended side effects, and wanted to share those concerns.
— Brian Armstrong (@brian_armstrong) November 25, 2020