Bitcoin was the talk across financial markets for all the wrong reasons on Tuesday after prices tumbled sharply to their weakest level since early December at $11,192.
Market jitters over South Korea potentially banning cryptocurrency trading has effectively eroded investor appetite for Bitcoin. With reports on a renewed crackdown on the cryptocurrency in China fueling anxiety over future restrictions, further losses could be on the cards in the near term. The sharp depreciation witnessed in Bitcoin today should remind investors on how explosively volatile and unpredictable the cryptocurrency can be.
Financial heavyweight Warren Buffet has already warned that “cryptocurrencies will come to a bad end”, and very early signs can be reflected in Bitcoin’s bearish price action today. One has to ask if Bitcoin is currently in the process of flickering violently before it burns out?
From a technical standpoint, Bitcoin is under pressure on the daily charts. The breakdown below $12,000 may encourage a further decline towards $11,000 and $10,000, respectively.
Commodity spotlight – Gold
Gold prices edged slightly lower on Tuesday with prices trading around $1,336 as of writing, amid a stabilizing dollar.
With the bias towards the Greenback still tilted to the downside, gold is likely to remain supported this week. From a technical standpoint, the yellow metal is heavily bullish on the daily charts. Prices are trading comfortably above the 50 Simple moving averages, while the MACD has also crossed to the upside. A breakout and daily close above $1,340 could inspire a further appreciation towards $1,360. Alternatively, a scenario where bulls are unable to conquer the $1,340 could spark a technical correction back towards the $1,325.