The Bitcoin price (BTC) it has been steadily declining today and is going through the $ 4000 level like this.
January 6 saw strong price action for Bitcoin, with the price rising from $ 3,800 to $ 4,090 on Bitstamp, drilling the resistance level of $ 3,900. This rally was caused by a brief simultaneous compression with the announcement of Bitfinex that it would be closed for a period of time due to server migration.
Basically, when this news was interrupted yesterday, some short sellers have closed their positions on Bitfinex, and closing a short position intrinsically requires the purchase of Bitcoin. When the shorts closed, the price of Bitcoin started to rise, causing other shorts to close, and so on until Bitcoin did not exceed $ 300.
The gains from the short squeeze rally are slowly losing, and it is possible that Bitcoin will return below the resistance level of $ 3,900.
If the market were favorable for a rally, the short compression on 6 January should have been enough to start it, but there seems to be strong downward pressure in general.
This downward pressure is perhaps due to Bitcoin futures traders on the Chicago Mercantile Exchange (CME). It has been shown that the maturities of CME futures contracts have a significant impact on the Bitcoin market. In fact, it seems that every month is defined by the fact that traders of future CMEs have lost much or less Bitcoin.
The last maturity of ECM futures was December 28th. In the Bitcoin price table below, this deadline is quite visible with a sudden crash just before the expiration, which is probably "slamming the lock", in which futures traders block the spot price of a right asset before the deadline to increase short profits.
Graph courtesy Bitcoinwisdom.com Bitstamp Bitcoin price data in US dollars (top) and Bitcoin volume (below).
After the expiration, Bitcoin was close to $ 3,900, and this is probably the case when CMC Bitcoin futures traders made short positions, mainly because it was a strong resistance level that was approached but not passed on January 5th. .
The short compression has broken the resistance level of $ 3,900, but if the traders of the CMC Bitcoin futures have really exceeded $ 3,900, one would expect that Bitcoin will drop below $ 3,900.
Other large cryptocurrencies in general are shrinking much more than bitcoins
Today is certainly a bad day for Bitcoin, but other cryptocurrencies seem to be worse. The total capitalization of the cryptocurrency today it has decreased by $ 3 billion. This was led by Ethereum (ETH) which fell 4% to $ 151, Bitcoin Cash (BCH) which fell 3.5% to $ 161, EOS which is down 4% to $ 2.76 and Litecoin (LTC) falling 4% to $ 37.70.
The current losses of Litecoin (LTC) and Ethereum (ETH) follow a month of substantial gains. Litecoin (LTC) earned $ 14 (58%) and Ethereum (ETH) earned $ 70 (84%) in the last month.
The current decline in the price of Ethereum (ETH) may be partially due to the general market trend, but it could also be 51% spillover on Ethereum Classic (ETC). The price of the ETC has declined 10 percent since today the news of the 51 percent attack has been interrupted, which has cut $ 60 million from market capitalization.
The 51% attack on the cause of the attack, which may have been ASTH by ETHash, led to a protest in the Ethereum community to ban ASICs in the hard gallows of Constantinople. The fork is less than 10 days away, and perhaps this is the beginning of a long battle in the Ethereum space between miners and developers. Ethereum Classic (ETC) will probably see heavy short-term losses, and Ethereum (ETH) could be dragged further down with it.
The next day they could see more losses for Bitcoin and other major cryptocurrencies if Bitcoin returns to the $ 3,900 resistance level and below, the level at which CMC Bitcoin futures traders have likely pulled out the courts.