Bitcoin back below $7,000

Adam Taggart
By Adam Taggart on Mon, Jun 11, 2018 - 11:51am

The crypto complex lost $25 billion overnight:

Bitcoin is back below $7,000. It has now lost 2/3 of its value compared to last December's high, and continues to follow the classic "popping bubble" curve:

With its latest drop, Bitcoin has broken below its support trendline (see the red candle dropping below the white line at right), suggesting lower prices are ahead:

The price drawdown is widespread across the entire crypto complex, with alt-coins liks SALT and Monero getting pounded to all-time lows for the year, as well. 

Analysts suspect this recent weakness is due to several factors, including:

  • A South Korea-based exchange, Coinrail, was hacked, leading to the loss of $40 million in alt coins
  • Weak trading volumes over the past month, a potential indicator of waning interest
  •  The CFTC has launched an investigation of whether big players have been manipulating the market

This appears to be a critical moment for cryptos, given that they're back at their lows for the year. If they crack even lower from here, how much father could they fall? Some technical analysts indicate the next potential support zone is all the way down at $4,000.

33 Comments

pat the rat's picture
pat the rat
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stocks/bitcoin

With the stock market being protected by the fed,bit coin market mght be a subatute for it ? 30 yeaars, 60 years,90 yeras 1generation, 2generation, 3generation who knows.   

Munson008's picture
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I guess I am in the camp of

I guess I am in the camp of bitcoin should be digital money. It should have all the qualities of money with the extra advantages of taking out the third party if desired and being divorced from a particular country. In my opinion btc no longer functions as money effectively. I will be looking for use-ability in my digital money as this space continues to grow and change and always with a mind toward freedom. 

New_Life's picture
New_Life
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6k within a week?

Possibly a small rally for BTC and then a further dip below here looks a real possibility in the next week or two.

SALT hit $1.15 this morning, Monero is now a third of its value in early March.

Mohammed Mast's picture
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BTC

At least $5700 maybe lower. Great buying opportunity.

Adam Taggart's picture
Adam Taggart
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Further to go....(?)

I cautioned back in December that Bitcoin and the crypto complex at large were likely caught up in a massive speculative bubble, perhaps the most aggressive one in all of history.

If indeed the case, we could expect a retracement similar to the 'classic' bubble curve seen time and time again as speculative manias have unwound.

This chart maps Bitcoin's price action vs several of history's largest bubbles. You'll see it has been right in line with the others so far -- and note that this chart is from April. Bitcoin's price has dropped further since then:

It's increasingly looking likely that Bitcoin will continue following this classic retracement curve as the remaining speculation drains out. As mentioned in my original post above, technical analysts are predicting that ~$4,000 is the next support level, and then if broken, ~$2,000 after that.

As painful as it may be to consider for current crypto holders, the classic bubble retracement suggests that $2,000 is certainly possible.

Will Bitcoin get that low? Who knows? At some price, enough investors will feel comfortable putting money in at a volume that will end the descent.

If the price indeed gets close to $2k, I'll definitely be one of them.

New_Life's picture
New_Life
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The biggest ever bubble...

Plenty of Fraud got it to $20k... 

If as Mark's says Tether (and presumably other fraudulent manipulation) is now "Too Hot"...

How will BTC fair for the next year or two without it?

https://cointelegraph.com/news/research-tether-bitfinex-manipulation-rea...

mrees999's picture
mrees999
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Fun times, except for the people purchasing in the last 6 months

Trying not to catch a falling knife, but people in my circles are licking their chops at a chance to double down when it bottoms. I suspect it could be at the point where it is no longer profitable to keep mining. That current fixed cost is about six thousand per bitcoin. It has reached that parity once before and bounced back wildly.

Remember there are boatloads of industrial financial powerhouse groups working the back rooms getting the necessary regulation for asset custody, ETF and much more. Almost all investment so far is retail. Industrial purchasers will dwarf those numbers. You can't use Google trends to predict this behavior as a privileged few will be the one percent with most of the cash to make the deals.

The market is maturing. Remember this whole asset class isn't but a five year old. This is all child's play so far. Just think what can happen once the "adults" start to play in this new asset class.

You ain't seen nothing yet.

New_Life's picture
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Adults are already here.?
mrees999 wrote:

Trying not to catch a falling knife, but people in my circles are licking their chops at a chance to double down when it bottoms. I suspect it could be at the point where it is no longer profitable to keep mining. That current fixed cost is about six thousand per bitcoin. It has reached that parity once before and bounced back wildly.

Remember there are boatloads of industrial financial powerhouse groups working the back rooms getting the necessary regulation for asset custody, ETF and much more. Almost all investment so far is retail. Industrial purchasers will dwarf those numbers. You can't use Google trends to predict this behavior as a privileged few will be the one percent with most of the cash to make the deals.

The market is maturing. Remember this whole asset class isn't but a five year old. This is all child's play so far. Just think what can happen once the "adults" start to play in this new asset class.

You ain't seen nothing yet.

Mark, agreed on the Google trends being ineffective for capturing Wall Street purchases.

Where did you get the statistic of approx $6k for fixed mining costs, the figures I've seen vary quite a bit depending on location. Even in the US it can go from $3k to $9k

https://www.investopedia.com/news/how-much-does-it-cost-mine-bitcoin-aro...

I believe $4k area could be a possibility, especially as "Adults" are already playing to short it further. That could put some miners out of business, possibly forcing them to liquidate their BTC positions and further drop the price.

There's also possibility of longer-term price suppression by "Adults" to consider, if Gold & Silver can be kept to near production costs why can't BitCoin?

I like Chris'es latest podcast guest, Ronald saying Cryptos & PMs are bedfellows rather than enemies, think you'll enjoy it if you haven't heard it yet.

Good to see you contributing on here still, looking forward to the next chapter of your Blockchain series (in between you enjoying retirement)

davefairtex's picture
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fun times
Fun times, except for the people purchasing in the last 6 months

"Well except for that, Mrs Lincoln, wasn't the play amazing?"

We can all see that retail is slowly dribbling out of bitcoin.

As I like to say, we don't know what kind of asset class bitcoin really is.  My gut tells me its a risk asset.  Currently, we're in a risk-on environment, and so bitcoin is moving counter-trend to that because of its  most recent bubble pop.  The 6k level seems important - it has bounced off that twice, but each bounce has been progressively less enthusiastic.  More likely than not, 6k will fail at some point.

Will buying this particular dip to 6k work out the same way the other two did?

Bounce #1 peaked out at 12k.  Bounce #2 peaked out at 10k.  Maybe this one will bounce to 8k.

Or it might just break down through 6k.

My sense, based on bitcoin's past behavior, is that we need to see the thing move sideways for a time before the chop-licking (or the knife-catching) by the whale group will be rewarded.

So far, we're still in the descending triangle pattern.

And of course if the world moves into a risk off mode due to a recession, I think bitcoin craters - with a caveat being the imposition of capital controls could rescue bitcoin as an escape hatch.  But if things get bad enough for capital controls to appear, the volatility in the coin space probably increases dramatically.

I know that Mark is hoping for an institutional Deux Ex Machina to rescue bitcoin from ugly chart and fleeing retail buyers.  Maybe that will happen.  Then again, those "goldman traders spending their bonuses on bitcoin" didn't work out so well for the traders, did it?  Promises of a secret, behind-the-scenes Deux Ex Machina getting ready to pump bitcoin higher...well it sure makes for an interesting story.  But I'm still seeing Tether fraud.  I don't think that shoe has dropped just yet.

That's my two cents anyway.

New_Life's picture
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Retail trading increasing.... & those Goldman traders

Retail trading increasing in countries in dire straits...
https://btcmanager.com/volatile-bitcoin-more-stable-than-venezuelan-curr...

Interesting article on price suppression...
https://steemit.com/bitcoin/@supercrypto1/4th-dimension-bitcoin-manipula...

Also Dave, "Then again, those "goldman traders spending their bonuses on bitcoin" didn't work out so well for the traders, did it? "

How do you know that? Why assume they went long? Surely the best traders make money when the price goes in either direction, there's tons of long AND shorting opportunities in the price action we've seen already this year.

davefairtex's picture
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assumptions

NL-

I assume that the goldman traders were supposedly going long because Mark said that they were spending their bonuses on buying bitcoin - not spending their bonuses on selling bitcoin short.  Mark said this in an attempt to make a bull case for bitcoin.  It was clear to me from context - if memory serves, of course.

Of course Mark can correct me if he meant something different.

"Goldman traders were spending their bonuses piling into the short bitcoin trade"

Yeah.  Mark wasn't saying that.  That I remember, of course.

I do see a slight uptick in google trends interest in both ethereum and bitcoin in the past week.  It isn't a big move, and it is moving up from some very low levels, but it is improving.

I'm also seeing my reversal code was recommending a buy around 6300 two days ago - after which it said to sell around 6500, but still...it is the first strong buy signal I've seen in 2 weeks.

 

locksmithuk's picture
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Cryptocurrencies are worthless, apparently

When TPTB start squealing about a new asset class you're know that they're running scared, and conversely that the asset creators are doing something right.

 

An "assessment" of cryptos issued today by the BIS is reported here. I think someone's made a mistake. Some researcher has foolishly substituted "Bitcoin" or "cryptocurrency" where "fiat" should appear instead.

 

Excerpts:

1. "Cryptocurrencies are not scalable and are more likely to suffer a breakdown in trust and efficiency the greater the number of people using them". - I think you mean fiat, sir

 

2. "For any form of money to work across large networks it requires trust in the stability of its value". - Again, I think you mean fiat, sir.

 

3. "Trust can evaporate at any time because of the fragility of the decentralised consensus". - Yet again, I think- ...hey, are you listening to me?

 

4. "The BIS’ head of research, Hyun Song Shin, said sovereign money had value because it had users". - That's how we're defining 'value' now, is it.... users? Kim Kardashian's Twitter page also has users.

 

5. “Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value.” - You haven't studied the history of fiat even to a small degree, have you? 

 

6. "Without users, it would simply be a worthless token. That’s true whether it’s a piece of paper with a face on it, or a digital token,” he said, comparing virtual coins to baseball cards or Tamagotchi. - Yup, righty-oh. A banknote is completely different then.

 

7. "The dependency of users on so-called miners to record and verify crypto transactions is also flawed, according to the BIS" - Really? So a solid blockchain platform and 1,000-or-so verification nodes across its network are all simultaneously wrong? Have you reported this to the network(s) in question? [They may be blissfully unaware of it.]

 

8. "Agustin Carstens, general manager of the BIS, has described bitcoin as “a combination of a bubble, a Ponzi scheme and an environmental disaster”. - Now I know you're definitely not listening. Refer to my response to item 1 above.

 

I don't know whether to cry hysterically from laughter or fear [about the fact that the fate of our collective financial future is in the hands of some of these bloody doughnuts].

 

Mark - should I keep stacking? cheeky

 

 

 

New_Life's picture
New_Life
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OMG, sliced in half

OMG now under $9.

It's now lost more than 50% of its value since Mark suggested we "Watch it very closely" just a couple of months ago...

Like many alts, (including SALT) it could be bottoming out here, all rides on whether BTC breaks below 6400 and lower support just under 6k.

If BTC breaks 5800, this could get really fugly.

New_Life's picture
New_Life
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Cool HODLing

In fact not cool, but COLD.

This stat is pretty amazing.  If its true I reckon its approx 8% of all BTC being held in Cold Storage. 

Now that is serious HODLing.

https://dailyhodl.com/2018/06/17/crypto-pioneer-protecting-10-billion-in...

mrees999's picture
mrees999
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Cost of mining

The latest estimate for bitcoin mining was mentioned by Tom Lee with the Fundstrat research group. He mentioned $6,000 estimate as of a few weeks ago.

I need to get back to writing those blockchain education posts.  I just made another trip back from Sturgis (I go in June to avoid the crowds for the August Rally). Picked up a nice Indian Scout Bobber this time.  Too painful to ride 800 miles back home through huge thunderstorms, so bought a Goldwing to go with it. (Bobber is being shipped).

Seems like every time I go to Sturgis we have a price tank.  Correlation = Causation? 

 

;-)

 

 

 

mrees999's picture
mrees999
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Welcome to my world

Haha, These comments are in a loop for the last five years. Read Bitcoin Obituaries (google it). These are all recycled from when bitcoin was less the $10.00 -  any. day. now.

He forgets to mention that currency is only one use. There are around 500 use-cases for blockchain so will all tokens suffer the same fate?  Perhaps he should google 'web 3 technology'.

 

I'm still stacking.

 

mrees999's picture
mrees999
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Welcome to my world

Haha, These comments are in a loop for the last five years. Read Bitcoin Obituaries (google it). These are all recycled from when bitcoin was less the $10.00 -  any. day. now.

He forgets to mention that currency is only one use. There are around 500 use-cases for blockchain so will all tokens suffer the same fate?  Perhaps he should google 'web 3 technology'.

 

I'm still stacking.

 

locksmithuk's picture
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Bitcoin crash (with popcorn)

mrees999's picture
mrees999
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An oldie but goodie

That was recorded in 2014.  

To continue:

 

Then another time, in January 2017, it finally went back to $1200 before it CRASHED all the way down to $750.

 

Then another time, in December 2017, it went all the way to $20,000 before it CRASHED all the way down to $6,200

 

If you are worried about bitcoin crashes, don't buy bitcoin.

mrees999's picture
mrees999
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Those sneaking Goldman's buyers

My context was that they were buying - but this was clearly antidotal evidence. This was a non-randomized poll involving people we knew and we might have held some influence on some of their decision-making opportunities.  It is also possible that the reports coming back to us were exaggerated at that time.

 

As far as what kind of asset to consider... Is it safety?  'Short' on the dollar? Technology position Tech(like) stock?

For me, when it was all about bitcoin (no mention of blockchain back then) - it was 100% safety\alternative. I clumped this with precious metals very early (2013) - some are just coming around to realize that now.

Then in 2015 when ethereum had its crowd-sale (now commonly referred to as an ICO) it became 50% safety and 50% new paradigm tech.

As a currency - they are slow to catch on and not liquid enough. But if there is a run to safety like we see in many countries where they are tipping towards hyperinflation, I can see that use-case gaining traction. Other more flexible payment systems like DASH are much better right now at performing currency-like transactions but it doesn't have any critical mass to move it.

So we had currency, and hi-tech, both carving out space in the asset class, and I see at least two more major categories developing that might take the majority of the pie even yet.  These new broad categories are even bigger, but 99.99999% of the world doesn't know it yet.

These talking heads are still stuck in 2013 when they analyze only currency use-case. That can't yet imagine the paradigm tsunami that going to make their jobs obsolete within a decade.

 

 

 

New_Life's picture
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BIS Turkeys
locksmithuk wrote:

When TPTB start squealing about a new asset class you're know that they're running scared, and conversely that the asset creators are doing something right.

An "assessment" of cryptos issued today by the BIS is reported here. I think someone's made a mistake. Some researcher has foolishly substituted "Bitcoin" or "cryptocurrency" where "fiat" should appear instead.

Found on the internet.... LockSmithUK - thought you'd like this....

The Bank of International Settlements saying Bitcoin is bad is like turkeys releasing a research paper about all the reasons Christmas is a terrible idea

 

New_Life's picture
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Mining Costs

Tom Lee's interview talking mining costs, all very generalised statements IMHO

https://cryptocoinspy.com/tom-lee-talks-bitcoin-crypto-mining-btc-price-on-cnbcs-fast-money/

Yet to see any really detailed research from FundStrat on the mining costs (probably only available to clients).  I'll keep hunting, meanwhile did find this.. 
 
I suppose a US average could be around $6k, still plenty of room for BTC to go lower to $5k (or $4k) in the next month or so and give the expensive over leveraged miners a moment of concern..
 

 

locksmithuk's picture
locksmithuk
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Turkeys and bitcoin
New_Life wrote:

Found on the internet.... LockSmithUK - thought you'd like this....

The Bank of International Settlements saying Bitcoin is bad is like turkeys releasing a research paper about all the reasons Christmas is a terrible idea

 

 

Aye, I do! It reminds me of something which was overheard coming from the house where Bitcoin lives -:

 

New_Life's picture
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Sweepstake...?

Okay for a bit of fun how much lower than $6k do we think this will go in the next week?

I'm going to guess around 5.2k.. any takers for lower?

pinecarr's picture
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Catherine Austin Fitts belief on Bitcoin

I'd be curious to hear what others think abuot Catherine Austin Fitts' comments on Greg Hunter's USAWatchdog re Bitcoin, starting about 30 minutes: Elite Stole $50 Trillion and Will Invest in Space

.  If I got it right, she thinks Bitcoin was an experiment, a prototype by the elites to test out and learn more about moving to a digital currency. She believes their goal is to move to a digital/cashless society in order to have the ultimate control over people.  Interestingly, Catherine's connection dropped soon after she started talking about this.

Adam Taggart's picture
Adam Taggart
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Bitcoin Just Broke Below $6,000

Important development: Bitcoin just dropped below $6k (9:40pm PST Sat) for the first time after hitting it's all-time high near $20,000 in December.

This after several days of failed rallies for BTC.

As I've reported earlier in this thread, many technical analysts have seen $6k as a critical support level that, if breached to the downside, could see Bitcoin and the rest of the crypto complex drop a lot lower -- some predicting $4k as the next resistance level.

Will that be the case?

Tomorrow will be a key day. And we'll be watching the action closely.

Adam Taggart's picture
Adam Taggart
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Bitcoin Market Cap about to drop below $100B

5 minutes after writing the last post about Bitcoin breaking below $6,000, it's now down to $5,900.

This is important because Bitcoin's market cap is now threatening to break below $100 Billion (currently at $101 Bil) -- a psychological milestone likely to depress enthusiasm for holding BTC (and cryptos in general) even further.

BTC has now lost more than $200 Billion in market cap since the beginning of 2018. Could it lose even more?

Quite possibly.

With the breaking of $100 Bil, a lot of speculators may be less enthusiastic than before about trying to catch the falling knife...

New_Life's picture
New_Life
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All eyes on tonight's weekly close (Sunday 23:59 UTC)

The current area of $5.8k correlates with a previous strong Weekly close on 6th Nov after which another Tether fuelled boost shot BTC up to new heights.

Will this area hold?

It's looking weak right now, price has already wicked below the weekly close of 5810 if I get chance I'll post up a chart when I'm next in front of a PC, hard to see the strength of any bullish divergence forming on a phone.

As I mentioned above I'm targeting areas below here, the first of which is $5.2k area...

davefairtex's picture
davefairtex
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not to pile on...

Not to pile on or anything, but one phrase sticks in my mind: Mark said that a bunch of bitcoin whales were licking their chops as bitcoin was dropping towards 6000.

But I got to thinking: if you are a bitcoin whale, what do you use to buy more bitcoin?  Presumably, if you're a whale, that means you already own an absurdly large amount of bitcoin.

Alternatively, if you owned bitcoin before, and then you sold it on the run to 19k - are you still a whale?

So I thought some more.  If you are heavily long bitcoin, and you have dutifully sat through the drop from 19k down to 6k (HODL!), you are almost certainly not licking your chops.  You are probably doing something else entirely - such as rueing the day, kicking yourself, re-thinking the whole HODL concept, wishing you'd sold more at the top, and so on.

Of course if you're a former bitcoin whale (which we might call a fiat-whale), then you could well be doing some chops-licking.

Just some musings as we break $6k.

I must admit, I do find myself doing a bit of chops-licking at these levels, being a fiat-minnow.  I'm trying to upgrade my reversal code to give me a hint as to when the low (a low?) will occur.  The trend-following code is largely useless due to the rampant manipulation, but I'm hoping that the reversal code will be able to learn what the bad guys are up to.

 

New_Life's picture
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Catherine Austin Fitts = old news...
pinecarr wrote:

I'd be curious to hear what others think abuot Catherine Austin Fitts' comments on Greg Hunter's USAWatchdog re Bitcoin, starting about 30 minutes: Elite Stole $50 Trillion and Will Invest in Space

.  If I got it right, she thinks Bitcoin was an experiment, a prototype by the elites to test out and learn more about moving to a digital currency. She believes their goal is to move to a digital/cashless society in order to have the ultimate control over people.  Interestingly, Catherine's connection dropped soon after she started talking about this.

She's been suggesting a similar thesis for a while... Seen previously on Greg's site...

sand_puppy's picture
sand_puppy
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Gold "death cross"

ZH reports several indicators where a trend has turned down:  EM Market Stocks, the Global Most Systemiclly Important Banks Stocks, Chinese stocks, Bitcoin and now Gold.

The 50 day moving average dropping below the 200 day moving average (the death cross) suggests a change in trend to downward.

Adam Taggart's picture
Adam Taggart
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Bitcoin Market Cap now under $100 Bil
Adam Taggart wrote:

5 minutes after writing the last post about Bitcoin breaking below $6,000, it's now down to $5,900.

This is important because Bitcoin's market cap is now threatening to break below $100 Billion (currently at $101 Bil) -- a psychological milestone likely to depress enthusiasm for holding BTC (and cryptos in general) even further.

BTC has now lost more than $200 Billion in market cap since the beginning of 2018. Could it lose even more?

Quite possibly.

With the breaking of $100 Bil, a lot of speculators may be less enthusiastic than before about trying to catch the falling knife...

Well, moments ago, Bitcoin's market cap just broke below $100 billion. So it's 'game on' now...

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