Bitcoin has slipped below $7600 as the market cap drops below $300 million. Bitcoin has only dipped below this level a couple of times this year, one being 18th March and the other being its fall to on February 6th.
So what is going on? As of Tuesday Twitter, put a ban on cryptocurrency advertising, following in the footsteps of other tech giants Facebook and Google. This essentially curtails the online promotion of initial coin offerings, ICO’s, which are now a popular way to raise funds.
The banning of advertising by major tech players has hit on the legitimacy of Bitcoin, quite simply it raised the question if the major tech players don’t want a part of this maybe its time to get out?
Looking at the chart Bitcoin has been trending lower since the beginning of the year, tumbling over 55% since its high of $17,256 at the beginning of 2018. After bouncing off its February low of 6000, the subsequent move higher failed to break resistance in the region of 12,000, instead producing a series of lower lows.
Bitcoin is down over 6% at the time of writing, with the selloff stalling in the region of 7545.Support can be seen at 7240, (March 8th low and 78.6% Fibonacci retracement from Feb 6 – Feb 20) a meaningful break through this level could open the doors to 7000.
A break below 7000 would push the 50-day moving average below the 200 day moving average in a death cross formation, a move which is considered the ultimate bearish signal, potentially accentuating losses.
Whilst media attention covering the death cross has been significant, it is worth remembering that this is a lagging indicator. Furthermore, it’s also worth bearing in mind, that the last time a death cross move pattern occurred in the bitcoin chart was September 2015.
Following this death cross, bitcoin rallied close to $500 by early November, up from $230.
On a weekly chart strong resistance can be seen at 6600. Even if the price falls through 7000 and the death cross formation follows it might not be all bad news.
A weekly end above 6600 could suggest that a bounce could be on the cards for the cryptocurrency.