Prices for bitcoin and other cryptocurrencies plunged over the weekend following news of a hack on a South Korean exchange. News of the hack of South Korea’s Coinrail exchange came after reports about U.S. regulators looking into price manipulation on the Bitstamp, Coinbase, itBit and Kraken exchanges.
In other words, it has been a rough few days for bitcoin and other digital currencies. Bitcoin, the largest cryptocurrency, dwindle to just over $116 billion when U.S. trading closed Monday. Yesterday, just one of the 20 largest digital currencies by market value closed higher. Some technical analysts believe bitcoin’s move below $7,000 is bearish.
“Bitcoin’s plunge below $7,000 to a two-month low indicates the cryptocurrency will have a difficult time recovering, technical strategists say,” reports CNBC.
The all-time high for bitcoin is around $20,000, which was seen in December 2017. In recent weeks, there have been plenty of calls for the cryptocurrency to return to those record highs and beyond. Still, bitcoin has some technical issues to deal with. A move below $7,000 could send bitcoin to $5,000.
A Long Road Back for Bitcoin
Bitcoin has been in a tailspin since early May and some traders believe the digital currency needs to make significant gains before market participants turn bullish. By some estimates, bitcoin would need to jump 30% to legitimize any rallies from current levels. A move of 20% typically confirms a new bull market.
Related: Bitcoin Plunges After Coinrail Exchange Hacked
“It’s important for bitcoin to hold support around $6,747 this week, Chris Kimble, CEO of Kimble Charting Solutions, said in an email. If that fails, bitcoin could drop to near $2,000, he said,” according to CNBC.
Bitcoin does not lack for supporters as there have been plenty of bullish calls on the cryptocurrency in recent weeks. Some crypto market observers have opined bitcoin could reach new highs this year, but those are just projections, but recent price action suggests some bitcoin bulls may have to reassess upside targets.
“The downtrend that began in early May is still intact and will need to be reversed to signal an improvement for BTC,” Robert Sluymer, technical strategist at Fundstrat Global Advisors, said in an email to CNBC.
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