Death Cross Forming in Bitcoin
|A bearish ‘death cross’ is forming on the Bitcoin daily chart. The pattern is defined by the 50-period moving average crossing below the 200-period moving average. Bitcoin has been in a steady downtrend, losing almost half of its value since the June high, when prices neared $14,000. Bitcoin prices peaked near $20,000 in December of 2017.
Amid the technically bearish picture, Bitcoin traders are already looking ahead to the ‘halving’ set to take place in May 2020. This event halves the rate at which new Bitcoins are created, with miners receiving 50% fewer BTC for verifying transactions. Bitcoin’s supply is limited to 21 million coins and currently there are roughly 18 million in circulation. Bulls expect the event to boost Bitcoin prices, while skeptics argue that the halving is already priced in.
Bitcoin’s recent low came on the heels of a November 21st statement from the People’s Bank of China (PBoC) Shanghai Head office. It announced plans to clamp down on illegal cryptocurrency trading and underscored the official government stance of embracing blockchain while warning of the dangers of cryptocurrency;
“Investors should be careful not to mix blockchain technology with virtual currency. There are multiple risks in virtual currency issuance financing and trading, including false asset risk, business failure risk, investment speculation risk. Investors should enhance their risk prevention awareness and beware of being fooled.”
Elsewhere, celebrity investor Mark Cuban bashed Bitcoin according to a Forbes article published on Tuesday. In an email to contributor Benjamin Pirus, the outspoken billionaire said that he sees no future scenario in which Bitcoin could be used as a reliable currency. He continued, stating: “Not because it can’t work technically, although there are challenges, it could, but rather because it's too difficult to use, too easy to hack, way too easy to lose, too hard to understand, too hard to assess a value.”
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