Bitcoin Unravels as Goldman Says No and Bears Cry Foul

Bitcoin slid by 8.81% on Wednesday, reversing Tuesday’s 1.23% gain with venom, to end the day at $6,710.7.

A particularly range bound start to the day saw Bitcoin hover at the 38.2% FIB Retracement Level of $7,376, with Bitcoin managing to move back through to $7,400 levels with a morning high $7,404 before the cryptomarket bombshell hit the news wires.

News of Goldman Sachs hitting pause on its plans to roll out a cryptocurrency trading desk hit the wires, leading to a late morning sell-off across the cryptomarket, with Bitcoin sliding through the day’s major support levels to a morning low $6,921.5 before steadying through the afternoon, support at the day’s third major support level at $7,000 kicking in to fend off more severe losses.

A second sell-off late in the day saw Bitcoin slide to an intraday low $6,700, the second sell-off removing the chances of a swift return to $7,000 levels, with Bitcoin pulling back through the 23.6% FIB Retracement Level of $6,757.

While the news of Goldman Sachs hitting pause raised concerns over the much talked about inflows of institutional money needed to steady a particularly volatile cryptomarket, news of cryptocurrency manipulation weighed further, with reports hitting the news wires of a sizeable short position being placed ahead of the late morning sell-off, pointing to market manipulation.

For the market, Goldman’s announcement may be a bigger issue, but with the SEC currently reviewing the rejection of 9 Bitcoin ETF applications, any noise of market manipulation and that could be the end of any near-term hopes of an approval for a Bitcoin ETF and may well result in regulators coming up with more debilitating rules that would really spell trouble for the Bitcoin bulls and the broader cryptomarket.

And, when it rains it pours, with reports hitting the news wires in the early hours of this morning of Bruegel, a Belgian think tank, releasing a report stating that cryptocurrency and ICO regulations should be introduced by the EU for the region. While think tanks tend to have little influence, it was reported that Bruegel’s report will likely be distributed to EU ministers ahead of Friday and Saturday’s gathering of EU finance ministers who have cryptocurrencies to discuss.

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At the time of writing, Bitcoin was down 3.89% to $6,443, with Wednesday’s reversal continuing into the early hours of this morning, Bitcoin sliding through the day’s first major support level at $6,472.47 to a start of a day morning low $6,302.2 before recovering to $6,400 levels. An early morning $6,731.3 high left the first major resistance level at $7,176.47 and the 23.6% FIB Retracement Level of $6,757 untested.

For the day ahead, a move back through the morning high $6,731.3 would support a run at the 23.6% FIB Retracement Level of $6,757 to bring $7,000 levels into play, while we would expect Bitcoin to fall short of $7,000 levels and the day’s first major resistance level at $7,176.47 on the day, with Bitcoin likely to face plenty of resistance at the 23.6% FIB Retracement Level.

Failure to move back through the morning high $6,731.3 to take a run at the 23.6% FIB Retracement Level of $6,757 could see Bitcoin take a bigger hit later in the day, with a slide back through to $6,300 levels bringing the day’s second major support level at $6,234.23 into play, Bitcoin having failed to break back through the first major support level at $6,472.47 in the early hours of this morning.