It’s a 'Matter of Time' Before Bitcoin Dips Below $6,000, Analyst Claims

Francisco Memoria

According to some traders, bitcoin’s mining costs saw it bottom out at the $6,000 mark as its months-long bearish trend supposedly came to an end. An analyst now argues it’s only a “matter of time” before the flagship cryptocurrency dips below said mark.

Through a blog post spotted by MarketWatch, Ziedins of CrackedMarket noted that while BTC has seen the $6,000 mark represent a firm support it bounced off of  numerous times in the past six months, every time it bounced it achieved a lower high.

Analysts usually see an asset in a bearish or at least neutral trend if it fails to achieve higher highs after bouncing off support levels. Ziedins stated:

First, we bounced to $17k. Then it was $12k. $10k came next. After that $8.5k. Earlier this month it was $7.5k and this weekend we stalled $6.8k. At this point, it is only a matter of time before we tumble under $6k support.

Bitcoin has been dropping since mid-December, after it hit an all-time high of nearly $20,000. This, despite numerous positive developments, which include the owner of the New York Stock Exchange (NYSE), the Intercontinental Exchange (ICE), launching a “global platform and ecosystem for digital assets” called Bakkt.

At press time, according to CryptoCompare data, bitcoin is trading at $6,450 after gaining 0.03% in the last 24-hour period. In the last 12 months, it’s still up by 65%.

BTC PRICE.png

Most other cryptocurrencies have also been struggling. The XRP token has lost 2% of its value in the last 24 hours and is trading at $0.51, while Ethereum’s ether slipped 0.3% to $211. A few altcoins like EOS and LTC are marginally up.

Bitcoin cash (BCH) is notably been pushing the market up after rising 18% to $523. Some analysts believe the cryptocurrency’s price has been rising after Bitmain, a large BCH investor, filed for an application to launch an Initial Public Offering (IPO) on the Stock Exchange of Hong Kong Limited (SEHK).

While most cryptocurrencies are down so far this year, Wall Street analyst and bitcoin bull Tom Lee has earlier this month revealed he created an “altcoin correction index” that was at an all-time high. Per Lee, the last time it hit a new high, altcoins enjoyed a 7-week bull run.

Lee, the co-founder of Fundstrat Global Advisors, has been maintaining a $25,000 by the end of the year bitcoin price prediction throughout the bearish trend. The analyst has in the past used historical evidence to argue hodling makes sense, as the cryptocurrency sees most of its gains in only a few days every year.

Bitcoin Trading at $600 Premium in India as Potential Ban Looms

Bitcoin (BTC) is currently trading at a roughly $600 premium in India, according to the market price available on the rupee-based exchange BitBns.com.

At the time of writing, bitcoin trades for just under 8 lakh rupees, or 800,000 INR, which is nearly $11,500 - significantly more than the going dollar price of $10,860.

This extreme price premium can be attributed to the difficulty of buying crypto in the country. As of last year, all regulated Indian banks and financial institutions have been banned from transacting in, and offering services related to crypto.

But the environment could soon become even more hostile.

CryptoGlobe reported in late April that a government working group made up of Indian tax, consumer protection, and general economic ministries had recommended a complete ban on even transacting or owning cryptoassets, much less integrating them into the mainstream, legal economy.

Bitcoin Demand Strong in India?

BitBns, one of the few operational rupee-denominated exchanges remaining, has apparently been able to skirt the increasingly draconian environment by allowing users to conduct their own P2P market, facilitated by the website, in order to buy and sell in Indian rupees. Other popular Indian exchanges, like Coindelta, have been forced to shut down.

The high premium may suggest a healthy demand in India for bitcoin and other cryptoassets, as Indians without international banking connections are forced to use the local currency to buy crypto. Data from crypto analytics website Coin.dance show that another popular crypto-fiat P2P platform, LocalBitcoins, has seen a sharp uptick in Indian trading volume since March-April.

indialocalbitcoins.png(source: Coin.dance)

CryptoGlobe reported last month that volumes were not affected by, and even increased in spite of, the threat of a crypto ban.

Indian Government Measures

One recent instance in particular shows just how far the Indian government seems to be going to control the Indian economy.

In late 2016, the national government suddenly and without warning even to its own ministries, declared that all 500- and 1,000-rupee banknotes currently in circulation were null and void - in an action that is known in India as “Demonetization.” These notes represented more than half of the physical money then in circulation in the country.

While the stated aims of the action were to root out corruption and “black money” from the economy, Demonetization has often been panned as a disastrous failure that cost 1% of the country’s GDP, a loss of 1.5 million jobs, and hurt the poor most of all.