Bitcoin is ‘based on thin air’ and ‘facilitates unlawful behavior’…
according to the President of the United States, Donald Trump. Trump tweeted his opinion of Bitcoin last Thursday, causing speculation throughout the Bitcoin world that his comment is connected to the recent Bitcoin correction. Bitcoin has seen its price go from a peak of nearly $14,000 in late June to a low of $9,000 on Wednesday. Despite the bad news, Bitcoin is still up 8.98% month-over-month, compared with the majority of top altcoins, which have lost anywhere from 17 to 30%.
Is Trump responsible for the price loss?
Not by a long shot. He may be responsible for giving the price a bit of a boost. Bitcoin is still peanuts compared to established securities such as equities and bonds, so at this stage, any publicity is good publicity. Additionally, the Bitcoin market is more insulated from Presidential influence than stocks or bonds. While the US president can start trade wars and initiate large spending projects for the government, there’s comparatively little he can do to affect the price of Bitcoin directly.
What about altcoins?
Those have fallen as well, but for reasons wholly unrelated to Donald Trump. Altcoins have been doing poorly ever since the 2019 bull run began, due to a combination of decoupling from the Bitcoin price and stronger fundamentals for Bitcoin. Litecoin, initially considered an outlier for overperforming other alts, has lost 30.44% this month alone. Though Litecoin’s upcoming halving has already seen the price rise by 20% yesterday, and will likely push Litecoin even higher.
So why is everything falling?
Well, it depends on your perspective. Compared with the start of the year, Bitcoin is up 155.55%, Ethereum gained 54.7%, Litecoin up 194.58%, with only Ripple losing 14.11%. These gains are all great news if you’re a HODLer. For short-term traders, on the other hand, they may be at the mercy of the economics of Bitcoin production. According to this theory, miners are incentivized to keep the price low pre-halving, then boost the price to a new high after.
What We Think:
There’s no need to listen to Chicken Little just yet — while some critical technical indicators, such as the moving average convergence divergence, have fallen below zero for the first time since December 2018, other, such as a prospective golden crossover. As a history lesson, the last golden crossover in Bitcoin’s price was seen just before the start of the bull run in February 2016. That, coupled with Bitcoin’s improving fundamentals and public attention, may signal that the current downtrend is unlikely to last for too long.
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