Bitcoin Price Outlook:
- Despite falling -25% since its June high, BTCUSD still boasts a 155% return in the year-to-date
- Although Libra is the cryptocurrency in the crosshairs of regulators, Bitcoin and other digital assets have taken notice
- One concern is that Libra could potentially undermine the financial system
Bitcoin Price Drops Below $10,000 as Regulators Grill Facebook's Libra
Bitcoin slid beneath $10,000 for the first time since July 2 as Facebook’s David Marcus testifies before a US congressional committee this week. David Marcus is the head of Calibra, Facebook’s digital wallet, and his testimony has revealed widespread concern and criticism toward the digital asset space from US regulators. Although Libra is not yet a tradeable cryptocurrency, the comments toward the asset type have seemingly rattled other coins from Bitcoin to Litecoin.
Consequently, Bitcoin traded from $10,800 to $9,700 in Tuesday’s session after probing support around $9,545. The 38.2% Fibonacci level has held for the time being, but the prospect of increased regulation on cryptocurrency may continue to weigh on BTCUSD. Should the pressure continue, the largest crypto by market capitalization will look to subsequent trendline support marked by the lows in May and June.
Bitcoin Price Chart: 4 - Hour Time Frame (May – July)
Conversely, bullish traders looking to drive the coin higher will first have to reclaim the psychological $10,000 level before they can test an ascending trendline from June and the 50% Fib around $11,525. Although the bullish trend witnessed throughout 2019 remains intact, fundamental drivers may continue to pressure BTC in the near-term.
To that end, a gathering of G-7 finance ministers is set to cover digital assets in Chantilly, France on Wednesday and Thursday. Similarly, IMF Managing Director David Lipton recently issued a string of comments regarding the dangers of the emerging asset class. That said, the cryptocurrency space appears to be under fire from multiple fronts as regulators look to clamp down on untraceable currency flows. As regulators attempt to reel in Bitcoin and Libra, follow @PeterHanksFXon Twitter for updates.
--Written by Peter Hanks, Junior Analyst for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX