Bitcoin Below $10000 And Exposed Lower After SEC Torpedo

Bitcoin Below $10000 And Exposed Lower After SEC Torpedo

down between 3% and 13% in the past 24 hours. The downdraft was created by a SEC statement regarding digital currency exchanges. Per coinmarketcap.com there are 1,545 cryptocurrencies and 9,178 markets or exchanges where they are traded. It isn’t surprising given the digital nature and relative newness of these “investments” or “securities” that the SEC is concerned about fraud and investors being taken advantage of.

[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

A visual representation of the digital Cryptocurrency, Bitcoin. Photo Illustration by Chesnot/Getty Images

Regulations is one of cryptocurrencies Achilles Heal

When I wrote “12 Reasons Bitcoin Could Fall Below $1,000,” the number one reason was regulations from various countries and regulatory agencies, such as the SEC. In December last year, SEC Chairman Jay Clayton released a statement about cryptocurrencies and Initial Coin Offerings. In it, he said, “Tokens and offerings that incorporate features and marketing efforts that emphasize the potential for profits based on the entrepreneurial or managerial efforts of others continue to contain the hallmarks of a security under U.S. law.”

It also included a bolded sentence, “Selling securities generally requires a license, and experience shows that excessive touting in thinly traded and volatile markets can be an indicator of ‘scalping,’ ‘pump and dump’ and other manipulations and frauds.”

New SEC statement targets exchanges, not the cryptocurrencies

When you look at Bitcoin’s chart from Wednesday, you can see when the SEC statement was released. The title of it is “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.” The statement included, “A number of these platforms provide a mechanism for trading assets that meet the definition of a “security” under the federal securities laws.  If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

Since Bitcoin and other cryptocurrencies trade 24 hours per day, it didn’t make much of a difference when the SEC released it. But to have maximum impact, it was during normal trading hours in the U.S. The one week chart below shows yesterday’s drop below $10,000 and a further drop today to around $9,300.

coindesk.com

Bitcoin one week price chart

The statement added, “The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not.  Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”

Lastly, it contained, “many of these platforms give the impression that they perform exchange-like functions by offering order books with updated bid and ask pricing and data about executions on the system, but there is no reason to believe that such information has the same integrity as that provided by national securities exchanges.”

Bitcoin could have farther to fall

The first chart shows Bitcoin’s price over the past three months. From its high of about $20,000 in December of last year, it fell to around $6,000 in early February. It rebounded to $11,200 and $11,400 over the past month, but has slide to under $10,000 this week and has taken another steep drop today. The two recent highs could be a “double top” from a technical perspective so it needs to hold around $10,000, otherwise it could test the $6,000 low.

coindesk.com

Bitcoin three month price chart

The second chart shows Bitcoin’s 50-, 100- and 200-day moving averages, which are the blue, red and green lines, respectively. This chart is only updated when the U.S. markets close so it doesn’t show Bitcoin’s current $9,300ish price. However, you can tell at $9,300 Bitcoin has fallen through the 50 and 100 day moving averages, so unless it rebounds quickly their support has evaporated. This is another indication from a technical chart reading that Bitcoin’s price is exposed downwards.

StockCharts.com

Bitcoin price chart

“>

Bitcoin and the other top 11 cryptocurrencies are down between 3% and 13% in the past 24 hours. The downdraft was created by a SEC statement regarding digital currency exchanges. Per coinmarketcap.com there are 1,545 cryptocurrencies and 9,178 markets or exchanges where they are traded. It isn’t surprising given the digital nature and relative newness of these “investments” or “securities” that the SEC is concerned about fraud and investors being taken advantage of.

[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

A visual representation of the digital Cryptocurrency, Bitcoin. Photo Illustration by Chesnot/Getty Images

Regulations is one of cryptocurrencies Achilles Heal

When I wrote “12 Reasons Bitcoin Could Fall Below $1,000,” the number one reason was regulations from various countries and regulatory agencies, such as the SEC. In December last year, SEC Chairman Jay Clayton released a statement about cryptocurrencies and Initial Coin Offerings. In it, he said, “Tokens and offerings that incorporate features and marketing efforts that emphasize the potential for profits based on the entrepreneurial or managerial efforts of others continue to contain the hallmarks of a security under U.S. law.”

It also included a bolded sentence, “Selling securities generally requires a license, and experience shows that excessive touting in thinly traded and volatile markets can be an indicator of ‘scalping,’ ‘pump and dump’ and other manipulations and frauds.”

New SEC statement targets exchanges, not the cryptocurrencies

When you look at Bitcoin’s chart from Wednesday, you can see when the SEC statement was released. The title of it is “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.” The statement included, “A number of these platforms provide a mechanism for trading assets that meet the definition of a “security” under the federal securities laws.  If a platform offers trading of digital assets that are securities and operates as an “exchange,” as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.”

Since Bitcoin and other cryptocurrencies trade 24 hours per day, it didn’t make much of a difference when the SEC released it. But to have maximum impact, it was during normal trading hours in the U.S. The one week chart below shows yesterday’s drop below $10,000 and a further drop today to around $9,300.

coindesk.com

Bitcoin one week price chart

The statement added, “The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not.  Many platforms refer to themselves as “exchanges,” which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange.”

Lastly, it contained, “many of these platforms give the impression that they perform exchange-like functions by offering order books with updated bid and ask pricing and data about executions on the system, but there is no reason to believe that such information has the same integrity as that provided by national securities exchanges.”

Bitcoin could have farther to fall

The first chart shows Bitcoin’s price over the past three months. From its high of about $20,000 in December of last year, it fell to around $6,000 in early February. It rebounded to $11,200 and $11,400 over the past month, but has slide to under $10,000 this week and has taken another steep drop today. The two recent highs could be a “double top” from a technical perspective so it needs to hold around $10,000, otherwise it could test the $6,000 low.

coindesk.com

Bitcoin three month price chart

The second chart shows Bitcoin’s 50-, 100- and 200-day moving averages, which are the blue, red and green lines, respectively. This chart is only updated when the U.S. markets close so it doesn’t show Bitcoin’s current $9,300ish price. However, you can tell at $9,300 Bitcoin has fallen through the 50 and 100 day moving averages, so unless it rebounds quickly their support has evaporated. This is another indication from a technical chart reading that Bitcoin’s price is exposed downwards.

StockCharts.com

Bitcoin price chart

(Why?)

Published at Thu, 08 Mar 2018 18:08:12 +0000

Reply

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.