Retracement or market meltdown?Jun 5, 2019
The current week began with rather bad news for crypto investors. First two days of the week set the minimum at the level of $7500, having reduced the BTC price for more than $1200. The supreme number of digital currencies from top 20 of capitalization is also running down after the basic coin. CoinMarketCap recorded the growth only for two tokens for the latest 24 hours – Bitcoin SV and Tron. Ethereum Classic (ETC) has lost 10% for the last 24 hours and is considered to be an outsider. Resulting in rather strong decrease, ETH capitalization reduced to $0.91 billion.
There are no obvious factors, able to press the market, that is why the reduction of majority of coins can be explained with profit taking. It this case it is necessary to understand how the market of cryptocurrency and prices setting works. BTC or other coins purchasing by the investors drives the demand up and supports the price increase. But the aim of any investor is not the asset purchase, but profit. Consequently, after the growth of BTC (or any other currency) bought earlier, investors lock in profits. The process of profit taking of assets (cryptocurrencies) bought earlier – is their sell out. Therefore, by fixing the profit, investors sell cryptocurrencies they bought earlier and this leads to demand decrease and supply increase. Everything mentioned generates pressure to the price.
Taking into consideration, that BTC price increased for more than 100% for the latest 2 months, profit taking is a logical process. It is also worth noting that observed bullish trend doesn’t have corrections. Everything mentioned elevates the risk of short term price decrease, but there is no subject for panic.
Observed BTC and major altcoins decrease should be considered as possibility for more profitable purchases and not wide sales.
LocalBitcoins officially removed cryptocurrencies cash trades
On June, 1, peer-to-peer cryptocurrency exchanger LocalBitcoins closed cash trades. This news triggered a wave of indignation within crypto community. Finland based company LocalBitcoins had to respond officially and confirmed the removal of in-person cash trades in Twitter.
The company explains the move was made due to local regulations – LocalBitcoins needs to adhere to the Act on Detecting and Preventing Money Laundering and Terrorist Financing.
“This condition demands us to follow certain sanctions and implement effective controls to mitigate related threats. In order to adapt to the current regulatory environment, we had to reconsider our policy on local cash trades as well as on the geographical areas where our service is available. Consequently, we took cash exchange out of our platform on Saturday, June, 1” – the company states. Since the end of May of this year the platform is not available for Iran users.
Thus we see more active and many sided regulation of cryptocurrency market, which is vital. In 2018 only more than $700 mln. were stolen as a result of hacker attack on the largest cryptocurrency exchanges.