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It's been a year since bitcoin reached a record high of $ 20,155 per coin and today it seems we are testing new lows of $ 3,122, a total drop of 84.5%.
This huge shift in value may seem unprecedented, but in reality, retracements of this magnitude have occurred no less than four times in the brief history of Bitcoin. For a better understanding of Bitcoin price cycles, see this article I wrote for Global Banking & Finance Review.
Since the cryptoassets are such a new concept, we are still finding ways to understand what their value should be. All activities in each market go through price discovery, but due to the rapid growth of the crypto industry, this price discovery process is currently underway on steroids.
What confuses me about the cycles of the market, in every market, is the way in which sentiment moves to such extremes that traders end up preferring to buy when prices are high and sell when prices are low, while in reality they should Exactly the opposite.
@MatiGreenspan
eToro, senior market analyst
Today's highlights
The bank led the sale
Turn it off
Bitcoin Advisor to the President
Note: all data, figures and graphs are valid from December 17th. All trading involves risks. Only risk capital that you can afford to lose.
Traditional markets
The shares fell further on Friday with things that have become really bad by the end of the day. There does not seem to be any specific catalyst or newsletter that drove the sell-off, just more of the same background we've been talking about for months.
One thing that sparked Friday was that the banking sector was more inexorably sold off than the rest of the markets, as illustrated in this Bloomberg chart.
Furthermore, it is now clear that US equity markets are generally subjected to greater pressure than their global counterparts so far this month.
It also makes sense. The United States seems to be the only one to lead the entire monetary tightening trend, closely followed by the European Union.
We have already heard last week from the ECB, which has announced it will stop buying QE from next year. This Wednesday we will hear from the Fed, which should raise interest rates by a quarter of a point.
Turn it off
The US government has until the end of this week to agree on a budget, and it seems they have their work cut out for them. Donald Trump is doing his best to include provisions to build a wall on the Mexican border, but the Democrats are firmly opposed to this.
If they do not reach an agreement, we could see another government arrest. It means that the United States ceases to pay their debts until further notice. This has happened no less than 20 times since 1976 and usually does not last more than a few days, but it remains a scary concept anyway.
The feeling at the moment is that there will be a temporary patch of the last minute that will kick the can at the beginning of next year, but we'll see how it will end. As for the markets, this type of events only increases uncertainty.
Blockchain Advisor
The supporters of Blockchain celebrated the last appointment at the White House Cabinet. Mick Mulvaney is a well known advocate of bitcoins and digital resources and his promotion to the White House Chief of Staff is certainly a great victory for the community.
Mulvaney has not only been registered as a support for digital resources, but has also supported two separate invoices designed to accelerate their adoption.
However, the celebration could be a little exaggerated. President Trump became literally famous for his catchphrase "you are fired" and it seems that his government is no exception. Here is a website that tracks some of the high profile departures and as you can see there have been many.
It seems that Mulvaney is no exception and has already begun his term on unstable ground. The first news circulating this morning is a video in which Mulvaney called Trump a "terrible human being" during the 2016 elections.
Of course, efforts have already been made to smooth things and we wish Mick good luck in his efforts to promote positive blockchain legislation from his new position.
In any case, it seems that in the critical markets there has been a nice wave in the last minutes. I can not wait to see where it is headed.
Good week ahead !!!
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