Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Bob Mason
Bitcoin speculation
Dice, dollar and bitcoin.

Bitcoin fell by 3.08% on Thursday, reversing Wednesday’s 2.17% gain, to end the day at $3,924.3.

The reversal came alongside the broader market, with the top 10 major cryptos seeing red through the day.

Tracking the broader market, Bitcoin slid from a start of a day intraday high $4,056.6 to a late afternoon intraday low $3,875.1, Bitcoin falling through the first major support level at $3,949.97 to come within range of the second major support level at $3,851.13 before moving back through to $3,900 levels.

For the Bitcoin bulls, giving up $4,000 levels will have been key, with Bitcoin having fallen short of the first major resistance level at $4,115.57 at the start of the day.

The reversal through the day came as the cryptomarkets prepared for the much hyped Bitcoin Proof of Keys event, with some investor concern over exchange solvency testing sentiment through the day.

In the heat of the global financial crisis, bank runs were a frequent occurrence, Lehman Bank’s collapse driving depositors to withdraw funds from their accounts elsewhere over concerns of a collapse of the financial system

The Proof of Keys event has been launched for two distinct purposes. Firstly, to incentivise Bitcoin holders to transfer their Bitcoins to private wallets, where they are then in control of their private keys, hence the name of the event. Following a number of thefts that led to over $1bn in cryptocurrency thefts in 2018 alone, hackers able to steal cryptocurrencies held on exchanges, there’s certainly good reason for investors to hold onto their Bitcoin and altcoins in private wallets. The only risk of loss is if an investor loses their private keys…

The second, and possibly as significant, reason for the event is to determine exchange solvency. During the global financial crisis, financial institutions had to ensure that there was sufficient liquidity to meet withdrawal demands of depositors. In the Proof of Keys event, there is some concern that some of the smaller exchanges, the market will be hoping that there are no major exchanges, may face a solvency issue, which would ultimately highlight question whether the Bitcoin’s held by an investor on an exchange actually exist.

So on the one side, investors moving Bitcoins from exchange wallets to private wallets would reduce the centralized element of the cryptomarket, which is the use of exchanges to store cryptocurrencies, and on the other side, it will ultimately demonstrate to what degree investors have been manipulated, if at all, solvency a must in the decentralized world of crypto.

Cold hard data is unlikely to be available this time around, but any news of an insolvent exchange, particularly one of the larger ones, and expect some market panic.

Get Into Cryptocurrency Trading Today

At the time of writing, Bitcoin was back in the red, down 0.39% to $3,908.8, with moves through the early morning seeing Bitcoin fall from a start of a day morning high $3,924.3 to a morning low $3,890.0 before moving back through to $3,900 levels.

While the day’s major support and resistance levels were left untested early on, direction in the day ahead will be hinged on the outcome to the Proof of Keys event, any negative news likely to weigh, though it may not be as bad as one would assume, with a large number of Bitcoin holders reportedly unaware of today’s event.

For the bulls, an early move back through to $4,000 levels would ease investor jitters, with Bitcoin needing to move through to $3,950 by the early afternoon to support a run at $4,000 levels.

Failure to move through to $3,950 could see Bitcoin pullback through the morning low $3,890 to bring the first major support level at $3,847.4 into play, with more material losses possible should the crypto news wires deliver bad news in the day.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.