Bitcoin bubble continues to burst
INTERNATIONAL - Since December 2017, The world’s biggest cryptocurrency Bitcoin has lost almost two-thirds of its value and it's bad year may be getting worse.
According to the Directional Movement Index, Bitcoin is on its strongest negative trend since the sell-off earlier this year.
The index’s ADX line is currently at 39.3. Anything above 25 is considered a strong trend.
Meanwhile, the index’s DVAN trend line, a divergence analysis that measures buying or selling pressure, is also giving off ominous signals.
Data show that the market in June has been holding onto an overall bearish sentiment, characterized by the red band in the top-most chart above, that started around mid-May.
With no end in sight to the selling trend in Bitcoin, the digital currency could test its 2018 low.
However, Richard De Sousa, a partner at AltcoinTrader told Business Report last week that Bitcoin, which sank to below $10 000 (R119 406.50) in value after reaching an all-time high of $19 783 last December, is showing steady growth.
When responding to questions, De Sousa said while many people would consider this a correction, this was something that had happened many times in the past, it is not something new.
“We have had corrections that lasted 411 days to be exact, that was after the last all-time high. If you take out out the period November/December 2017 and just cut out that section in the graph, you will see a steady rise in the price through the years.
“We believe that there will be another bull run in the future and once again there will be a correction,” he said.
He said Bitcoin was neither a currency nor a commodity. “It is at this stage forging its own path. The closest thing that we could consider it to is a store of value. It is not something that is traded back and forth very much, so we should be careful in its classification.”
- BUSINESS REPORT ONLINE, BLOOMBERG