Bitcoin price analysis: ECB council member calls cryptocurrencies “a fairy-tale story.”

A member of the European Central Bank (ECB) governing council is reported to have blasted digital assets according to a report published by Bloomberg on January 7. Ardo Hansson was attending a conference in Riga, Lirvia where he reckoned that cryptocurrencies will in the near future end up as a “complete load of nonsense.”

The member went ahead to say that “the bubble has already started to collapse and maybe we should just see how far this collapse goes, and what is left when we’ve reached a new kind of equilibrium.” In continuation he said:

“I think we will come back a few years from now and say how could we ever have gotten into this situation where we believed this kind of a fairy-tale story.”

He is also reported to have emphasized on regulators to protect the interest of the investors in the cryptocurrency industry. Moreover, he said that digital assets are likely to be utilized in facilitating illegal activities. Hansson said that financial stability is slowly threatened by the existence of the virtual assets whose link to the traditional financial market continues to get stronger.

Bitcoin price technical picture

Following the breakout covered in the price analysis on January 7 where Bitcoin blasted past the resistance at $3,900 and $4,000 to hit a 2-weeks high above $4,100, BTC/USD has slumped back below $4,000 and is now exchanging hands at $3,983. The asset is in a downtrend as seen from the stochastic oscillator in the 1-hour range. However, the 100-day Simple Moving Average (SMA) is working as immediate support. The question of whether the short-term support will hold depends on the amount of buying activities in the near-term. Another support is, however, highlighted at the former range resistance, $3.900 while $3,600 is a much stronger support area.

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BTC/USD 1-hour chart