Bitcoin (BTC): Things Getting Ugly-Ish Again – What Now?
Bitcoin (BTC) price drops as Binance confirms warning from Japan's Financial Services Agency (FSA)
Bitcoin (BTC) price stays below $8,600 as Binance confirms JFSA warning. Changpeng Zhao, Binance’s CEO has confirmed that indeed they have received “a simple letter” from the JFSA.
His comment that they would find a solution confirms what many believe; that indeed the Nikkei story could be true.
Even though CZ, as he is popularly known, promises that everything will be alright, the sentiment is already heading south. Bitcoin (BTC) prices continued to teeter as it failed to rally for the third day in a row.
And it seems we need to have positive news in pace to avoid BTC’s uncertainty from pulling the rest of the market down, as is always the case.
Changpeng Zhao stays positive and he wants us to do the same
The Binance CEO to investors: “Hodl; this will pass- that’s what I do”
Binance has the second largest volume of daily BTC trade after BitMEX. And Zhao knows how news about it could affect sellers. Thus, to assure users, CZ advised the following.
“No need to worry. Some negative news often turns out to be positive in the long term. Chinese have a proverb for this. New (often better) opportunities always emerge during times of change.”
The effect of the Binance-JFSA “issue” is that some BTC holders might panic and dump coins in the market, further exacerbating the situation.
Today’s confirmation that the JFSA had sent them a letter doesn’t make things any better. While he had said that his team was in “dialogue” with Japan’s financial watchdog, it’s interesting that he also seems to buy into the conspiracy narrative he himself began on Thursday. He responded to a tweet on his page by saying this:
“Didn’t you know? It’s “sell on rumors, buy the news”. By the time things are confirmed, dump is over. The guys (maybe you too) saying to dump are just trying to buy from you at the bottom…just hodl then. Simple, it’s what I do.”
He is likely saying that the market should not overreact because whatever is happening is probably a scheme to dupe holders into selling. But we know it can’t be simplified to that level only. What we need is this thing to be sorted out, quickly and conclusively.
A good start vanishing
Bitcoin started the week on a solid ground, buoyed by the improved market sentiment over last weekend. This was after FSB communicated that no further regulatory action would be pursued in the near future.
But that has quickly evaporated, the brief bullish signal disappearing Thursday and continuing on Friday. And this time, it’s due to what the Binance CEO Changpeng Zhao called “irresponsible journalism” by news outlet Nikkei. The report claimed that the Japanese Financial Services Agency was planning to take action against the exchange for illegal operations in the country.
And as it almost always happens when such news comes out, Bitcoin (BTC) prices dropped an average of -3.3%. The trend has continued on Friday, BTC/USD dropping -5.07% in the hour-to-hour charts and -2.92% on the 24h chart.
The number one cryptocurrency had rallied to over $9,000 by Wednesday, signaling that a short-term bull run was likely to be sustained over this week. However, BTC/USD has had a rough two days, trading between the values of $8,700 and $9,200.
Bitcoin’s brief push past the $9,000 resistance line to trade above $9,000 had buoyed investor confidence. It was expected that the coin would sustain the push, mirroring its $2000 jump over two days of positivity in the market.
Yet that has changed and according to a daily snapshot by CoinDesk Markets, investors should prepare for a possible bearish reverse. It’s like the Binance news will definitely cement a pullback.
The chart shows that the reversal is in favor of a sell-off, an aspect that is counter-productive, as it is strengthening the bears. However, the positive RSI divergence on the 1h chart could still be able to yield a retest of prices in the range of $8,660- $8,700.
Signs are that BTC could still find support above the $8,600 trendline. This will only happen if the bulls rally past the $8,752 mark, which is the immediate former support level that is now its new resistance line.
We continue to watch out for the performance of Bitcoin [BTC] as the expectation remains that prices won’t tank below $8,000 this week. But then again, perhaps Changpeng Zhao is right. Whatever, the situation, the best way out is to hodl.