Bitcoin is not quite in freefall but the bears seem to have given up the ghost for now. Bitcoin is currently trading at $7,340. Support may materialise at $6,664, the low seen on 6 April and in early February. That double dip of the past four months suggests consolidation is taking place but if support fails at the $6,600 mark then we could revisit the lows in the high $5,000s, last seen in November 2017.
The latest leg down has likely been given some oxygen by the announcement by the US Justice Department that is undertaking a criminal investigation in to bitcoin price manipulation and similar concerns regarding other crypto.
All the practices long outlawed in the mainstream equity markets are thought to be rampant in the crypto markets.
According to Bloomberg, the Justice department is working with the Commodity Futures Trading Commission and is reported to be particularly concerned about spoofing, where orders are made and then withdrawn to give the impression of price movements in either direction that are in fact false. Pumping and dumping schemes are also much in evidence in crypto markets, with the Telegram messaging app a particular favourite for organising the schemes.
The authorities are also concerned about traders working in consort, a practice which is illegal in regulated markets and wash trading where people trade with themselves to give a false impression of market price movements.
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane