Bitcoin Turns Defensive Following Sunday Slide; Binance Euro Platform Sees “Huge” Demand Amid Brexit
Bitcoin traded within a narrow range on Monday, after a sharp and sudden reversal during the previous session dragged prices back toward $3,500. The largest digital currency by market capitalization faces renewed headwinds in the wake of yet another failed attempt to break through the $3,700-$3,800 range.
The bitcoin price slipped 0.4% on Monday to $3,581.16, according to aggregate data provided by CoinMarketCap. Bitcoin fell 4% on Sunday in the span of an hour, where it briefly pierced below $3,550. During the previous session, BTC had gained 2.5% as part of a broad market rally that included altcoins and tokens.
The following chart highlights bitcoin’s present value via Bitstamp. Weak momentum via the MACD can be clearly observed.
A sustained drop below $3,550 would spell trouble for bitcoin, as it would mean the loss of a long-term vital support. This would likely lead to an imminent drop to the $3,400 region and, possibly, a re-test of the December low near $3,100. Another possible scenario is a bounce off $3,400, which would keep prices very much rangebound.
Trading in BTC has picked up sharply since the beginning of the year, with daily volumes climbing above $5 billion. Over the last 24 hours, more than $5 billion worth of BTC traded hands on virtual currency exchanges. BitMEX continues to be the largest by overall volume, though its share has declined after it announced the closure of U.S.-based accounts.
Bitcoin’s market cap is currently valued at $62.6 billion, which represents 52.4% of the overall crypto universe. Its share has steadily increased during the bear market as interest in altcoins and tokens continued to diminish.
Europe and the Future of Crypto
Cryptocurrency exchange Binance has shined the spotlight on the European region after the company announced it would expand its fiat-to-crypto offerings to the region. The leading exchange will service the region through the Island of Jersey, a self-governing entity of the United Kingdom. The Binance Jersey platform will allow traders to buy bitcoin, Ethereum and other cryptocurrencies through traditional fiat channels like the euro and British pound.
Binance CEO Changpeng Zhao, also known as CZ, said the new exchange is “overwhelmed with registrations.” As Forbes recently noted, the strong demand for crypto trading comes at a time of heightened uncertainty regarding Brexit. That uncertainty has not only roiled traditional financial markets, it has cast a dark shadow over London’s role as a traditional banking hub.
Although bitcoin and Brexit aren’t directly linked, cryptocurrency regulation in Europe is likely to crystalize this year. It remains to be seen whether this will serve as an added draw for investors to diversify into digital assets as a store of value should Brexit implode.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.