The Bitcoin price just fell below $7,500, reaching another bottom after testing the $8,200 resistance level. Even though experts say that hitting the $7k gap is inevitable if the price wants to spike over the $8k gap, some people are concerned about the hard 6% drop from $8,300 to $7,365.
Three factors are affecting the recent correction of the cryptocurrency market, including:
- the Mt. Gox sell-off in early May
- the Bitfinex taxation policy
- the scandal involving South Korea’s two largest cryptocurrency exchanges UPbit and Bithumb
All of these factors led investors to lose confidence and trust in the cryptocurrency market in the short-term. Bitfinex led large-scale investors to become fearful of a potential government intervention too – and withdrew big sums of funds from the exchange.
The scandal in South Korea made local investors bewildered, not knowing whether the local crypto market can be trusted or not.
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On top of this, the strong downtrend of BTC and other major cryptocurrencies have disallowed the market to rebound.
The situation with the tokens being traded is quite similar. As you probably know, tokens often increase or decline in value by larger margins when compared to other major cryptocurrencies. Over the past few days, Ontology, Aelf, ICON, 0x, Decentraland, Ziliqa, and AirSwap (all tokens) have recorded 20% gains – and now recorded losses in the range of 4% to 12% against Bitcoin and 8% to 16% against the dollar.
If the Bitcoin price fails to rebound and again test the $8,200 region, it is likely that these tokens will continue to drop against Bitcoin and the US dollar.
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