Bitcoin’s break above $12k proves short-lived
BTC falls $500 in 10 minutes after breaking benchmark
Early Monday morning, Bitcoin broke $12,000 for only the second time this year.
The crypto Twittersphere greeted the news, with the likes of Tyler Winklevoss, stating: “And #Bitcoin has breached 12k. Great way to start the week!”
Its stay above the key psychological benchmark proved short-lived, however.
After no more than eight hours, the world’s leading cryptocurrency had tumbled back to whence it came, falling by more $500 in the ten minutes between 10:20-10:30 GMT.
The failure of BTC to absorb selling pressure above $12,000 could turn some traders bearish. Indeed, on top of the second rejection of this benchmark in just over a week, Bitcoin is now faced, in the short-term, with the pressures of a stronger dollar.
Having sunk to its weakest level in a decade towards the end of last month, the global reserve currency has strengthened of late. A sign of this change can be found in the fact that Morgan Stanley has exited its short position and declared that the dollar is at its most oversold level in over four decades.
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BTC bulls will nonetheless emphasise the long-term case for Bitcoin confidence. While the US money supply has grown by 20 per cent since the start of the year to the end of July, from $15.3trn to $18.3trn, Bitcoin’s supply is finite at 21 million BTC.
With government and central banks sticking to their inflationary predilections and institutional investment in the cryptocurrency space only increasing, a sustained breaking of the $12k benchmark is hardly unlikely. A small matter of when remains uncertain, however.
Adding weight to this optimistic outlook, by mid-afternoon Monday trading, BTC had recovered much of the ground lost in the morning’s sudden plunge and stood at $11,949.
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