(December 20)Bitcoin appears to have topped out as excitement about the first two future exchange launches fades and attention turns to other cryptocurrencies particularly Bitcoin cash.
|Bitcoin price declined several thousand from recent high|
The price of bitcoin has declined well over $3,000 from its recent record high of $19,783 back on December 17th. Over a recent 24 hour period the price of bitcoin declined by 4 percent.Trading volume jumped to more than $19 billion.The large volume indicates that the decline could continue into the weekend as there is perhaps a strong sell-off with profit-taking.Present prices of bitcoinAt 21:32 UTC (Universal Consolidated Time) the price of bitcoin was $16,368. Of course it could be much different by the time you read this. Its opening on December 20th was at $17,608 and its low so far was $15,517.While the price has recovered considerably from its low, it remains well below its open and over $3,000 below its recent high.Causes of bitcoin drop in priceMoney seems to be flowing from bitcoin into other cryptocurrencies particularly bitcoin cash. This is prompted to a considerable degree by bitcoin cash being listed and fully supported on the Coinbase exchange.The listing of bitcoin on two futures exchanges has increased interest in other cryptocurrencies including bitcoin cash.Bitcoin cash and litecoin are seen by some analysts a alternatives to bitcoin as both have faster transaction speeds and lower fees.As suggested in the appended video, perhaps "the whales", very big players, are selling and taking profits to buy back in later at a much cheaper price or alternatively investing in other cryptocurrencies.Future outlook according to chart analysisAccording to an analysis of the price chart of bitcoin the sell-off could run out of gas about the $11,000 level. So far there is no sign of the bitcoin price declining to that level.The high of just under $20,000 is likely to remain such at least in the short term.If the price of bitcoin closed above the 5-day moving average of $18,680 this would indicate a sharp recovery and a possible spike up above $20,000. However there is no sign of that as yet. There is some recovery but not enough yet to reach even $18,000.Investigation of insider trading of bitcoin cashCoinbase has announced that it is launching an investigation as to whether any of its employees violated its insider trading rules. There were widespread accusations on social media that some employees tipped off others in advance that the listing on Coinbase was to happen allowing them to buy bitcoin cash before its sharp rise in value.The issue is also discussed in a recent Digital Journal article.The controversy and the suspension in trading may help bitcoin recover from its sharp decline.
Previously published in Digital Journal