Bad week for the cryptocurrency market

A very bad week for all cryptocurrencies with a capitalization of more than $ 1 billion. At the same time, Bitcoin SV (BSV) became an outsider among the TOP10 cryptocurrencies, having fallen by almost 40% over the previous week. Over 30% lost Bitcoin Cash (BCH), while BTC lost 11%.

There are plenty of reasons to return the cryptocurrency market to the red zone. First of all, we will focus on the incredibly strong growth before. We recall that since the beginning of this year, the price of BTC has increased more than 4 times, while a significant part of the growth occurred over 2.5 months. As a result, the observed downward price movement may be due to profit taking on previously opened long positions.

It is noteworthy that Bitcoin continues to increase its market share while the collapse in prices.

Additional pressure on the cryptocurrency market could have tweet of Donald Trump. The statement that he is not a fan of Bitcoin and other cryptocurrencies, of course, has a negative impact on the market. In addition, Trump also mentioned actively discussed project Libra from Facebook.

It is very difficult to say how strongly Donald Trump’s tweets influence the decision of large investors, but it’s impossible to ignore this fact.

Another reason for reducing investment interest in the cryptocurrency market was a bill submitted to the US Congress called Keep Big Tech Out Of Finance.

It was introduced by the House Financial Services Committee and implies a ban on “creation, support or maintenance of digital assets intended for mass use as a medium of exchange, accounting units or means of accumulation”.

We recall that Donald Trump expressed not only no confidence in Libra, but also emphasized that if Facebook wants to have its own cryptocurrency, then it needs to become a bank. This tweet supports the above noted bill, which increases the pressure on the cryptocurrency market.

Another bearish fundamental factor for BTC and the market as a whole was the comments of  Jerome Powell, US Federal Reserve Chairman. He agreed that in theory, cryptocurrencies can eliminate the need for reserve currencies, the main of which is the US dollar. In practice, this does not happen, because Bitcoin does not perform all the functions of a currency. Almost no one uses BTC as a means of payment, which makes it a speculative instrument for accumulation.

Summing up, we see quite active opposition to the development and popularization of cryptocurrencies in the United States. Against cryptocurrencies stand: the President of the United States, the Chairman of the Federal Reserve System, as well as the bill in the US Congress. All this holds back growth and may be a long term factor.