Bitcoin PLUNGES 15% in a Day – Here’s Why

September 26, 2019
“Bitcoin is a technological tour de force”
― Bill Gates

5-Day Change

  • Bitcoin $8,200
  • Ethereum $166
  • S&P 500 $2,975
  • Dow Jones $26,935

Bitcoin PLUNGES 15% in a Day – Here’s Why

After months of sideways movement, Bitcoin seems to have finally decided on a direction...and unfortunately for HODLers, that direction was straight down. The cryptocurrency’s plunge started below $9,400 and didn’t even pause at the longstanding $9,000 support, before bouncing off at $8,030 and stabilizing at around $8,400.

So why did it fall so much and so quickly? A pet theory that’s been discussed in our cocktails previously is the idea that the $9,000 was an ‘artificial’ floor created by Bakkt investors and traders who wanted to cash in on a spike in price following the launch. Once Bakkt launched, and disappointingly, that floor was removed, with predictable results.

Any other theories? Some other persuasive ideas involve sell-stop orders being triggered if $9,000 was broken, causing a snowball effect, or that investors shifted their funds to bonds after seeing nothing but signs for further sideways movements.

What about the alts? They didn’t escape the carnage, with major alts like Ethereum losing 9%, EOS falling 19%, Litecoin losing 22%, and XRP losing 6.8% of their USD price. For the alts at least, it’s a continuation of the trend that’s seen even the more popular coins lose prominence to Bitcoin.

Wut We Think: Bitcoin going down doesn’t mean the world is falling, but instead, an opportunity – with bears targeting $7,700, there’s a good bet that shorting Bitcoin could pay off handsomely. Or, waiting for the fall to sub $8,00 and buying up coins cheap while Bakkt’s futures are just getting started is another option.


TON Slipped by Regulators, while Libra Didn’t – What’s the difference?

The future of Facebook’s Libra is becoming more uncertain by the day...but the future of Telegram’s soon-to-be-launched coin, Gram, has never been brighter. Like Libra, the Gram coin and Telegram’s blockchain, TON is positioning itself as a way to send money between users of the 365-million strong messaging system

Why is Libra targeted while TON isn’t? A lot has to do with Facebook’s visibility, versus Telegram’s, and also the scope of the project. Unlike Libra, the Gram coin will be a legitimate cryptocurrency, with all the decentralization that that entails. And it isn’t seen as a threat to central banks, with an ECB spokesperson call TON ‘another crypto experiment.’

What’s TON’s status? They plan to launch by the end of October, and beta source code was revealed on September 8th. Most of the infrastructure is in place, and it promises to be faster than other cryptocurrencies like Ethereum or Bitcoin.

So TON is safe from regulators? For now. Being an actual cryptocurrency that isn’t controlled by a central entity helps, but it’ll raise similar concerns as Libra in the future. After all, they’re both looking to be payment processors for a large social media userbase – and if regulators are distracted by Libra now, they’ll turn their attention to TON eventually.

Wut We Think: Gram represents the potential to take crypto to a mass audience – far more than Libra, which isn’t even a cryptocurrency, ever had. And while a light touch from regulators is helpful for the moment, it won’t stay that way forever – especially if it gains momentum. For traders, though, the important thing to remember that adoption may not necessarily be that quick, every Telegram user will receive a TON wallet, and even slow adoption is still adoption. 


Trading Spotlight: Short Positions

How do you make money in a downtrend? This is often a surprisingly overlooked factor, especially in crypto, where so much of the conversation is dominated by HODLers. However, canny crypto traders know that the secret to making money isn’t just going long – it’s knowing when to go short.

Short Position: A short position is a method of profiting off the fall in price of an asset. To short sell something, the trader borrows the underlying asset and sells it at the spot price. If the price declines, the trader can then purchase the asset again and return it to the borrower, pocketing the difference. To learn more about short selling on the Monfex platform, take a look at the Monfex Trading Academy.

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