Bitcoin is at $24,000
Despite a myriad of bitcoin rumors (which we’ll get into below) causing the price to fall in most places, in some places, bitcoin is in fact way up!!
On Iran’s Exir exchange, the price was reported to be as high as 100 million Tomans on Tuesday, which translates to about $24,000 at current prices.
This comes following an announcement that the government is now taking a more favourable stance towards crypto mining.
In a strange way, the dynamics of supply and demand are working contrary to what’s happened recently with Iranian oil. When Obama relaxed Iranian sanctions, it suppressed the price of oil, as the market was expecting more supply to come online.
Here, however, the price has shot up. This is seemingly due to the excitement in the country that the government is moving towards acceptance of cryptocurrencies, in a place where the home currency can is not always seen as a stable store of value.
eToro, Senior Market Analyst
- Social Conundrum
- Dollar Victim
- Bitcoin Whale Tail
Please note: All data, figures & graphs are valid as of September 6th. All trading carries risk. Only risk capital you can afford to lose.
Renewed drama surrounding the regulation of social networks seems to have depressed the stocks yesterday.
The CEO of Twitter, Jack Dorsey, and the COO of Facebook Sharyl Sandberg, were grilled by Congress yesterday. It now looks more likely that US politicians are interested in pursuing tighter regulations on the tech giants.
Google was also invited to join the meeting but unfortunately, their chair remained empty. The fact that people are starting to ask the tough questions and that citizens and governments are demanding answers seems to have brought down the tech-heavy Nasdaq index yesterday.
The Next Victim
US Dollar strength continues to wreak havoc across the financial markets. We’ve mainly been focused on the smaller currencies of late but it seems that yesterday even the Australian Dollar has reached fresh lows.
The price action is slightly peculiar as it follows a strong GDP report and a relatively strong economy. Some reports are suggesting that this is due to fears of crossfire from Trump’s trade war, but in my mind, we should probably be more focused on the roaring strength of the greenback.
Crypto Rumors Flying
Bitcoin is down more than $1,000 in the last 48 hours and the damage to the altcoins is even worse. Naturally, everyone is asking ‘why’?
Well, the fact that people are asking already indicates that it’s not entirely clear. According to market dynamics, all price movement can be explained by supply and demand. At the moment, it seems that there is simply more bitcoins being sold than bought.
However, there are a few things we can point out that could be influencing the decision of cryptotraders at the moment.
First… an article from Business Insider indicates that…
The expectation that Goldman will soon be opening a crypto-trading desk has been seen as a positive thing for the market, so this report comes as somewhat of a disappointment.
However, the above article quoted an anonymous source and so should probably be treated as unconfirmed. When later contacted, Goldman’s spokespeople were noticeably more neutral about their future plans.
Secondly… it’s also possible that the there could be further selling pressure in the altcoins due to the Ethereum drama that we highlighted in yesterday’s market update.
Thirdly… fresh stories are emerging about a possible whale surfacing from the olden days. Apparently, a wallet that is reportedly connected to the old bitcoin pirate marketplace known as Silk Road, has moved a few coins worth about $1 billion. The crypto markets love a good whale tale.
Of course, Bitcoin’s volumes across global crypto exchanges are now firmly above $6 billion per day, so even if this pirate whale decides to breach, it probably wouldn’t make much of a splash. In these cases, perception can be worse than reality.
Finally, my favourite explanation lately remains the strength of the US Dollar. As indicated above, the Dollar has been taking a lot of victims lately. The USD has been the global reserve currency for decades now so for as long as it is showing strength and bitcoin is perceived to be in a bear market, many people will likely be looking to the buck as a more stable store of value.
All in all, the events of this week and price action has not been too extreme.
This sort of volatility is quite normal for crypto-assets and we’re not seeing anything new here. In fact, if anything, the crypto markets remain stable as ever.
Here is the chart we’ve been tracking for the last few months. As you can see, we’re right in the middle of the same steady trading range that we’ve been in for the last six months.
Let’s have an awesome day ahead!!
This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.
Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.
Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.
Senior Market Analyst
Connect with me on….