$8000 run followed by resistance: about week 20

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$8000 run followed by resistance

Week 20, 2019: I would describe this week as one of the craziest in the last year. The $8000 FOMO run, followed by some resistance, happened so quickly that I had to look retrospectively to be able to write this article.

The gain of momentum for the $8000 run followed by resistance

The past few weeks have clearly shown signals that the bear trend is coming to an end. It suddenly felt like the crypto market is finally not frozen as it acted for the past few months. Moreover, it seems like most of the dynamic we missed out on gathered up in one marvellous week.

These awesome moments might not have the most awesome effects on the market. When talking about crypto, FOMO is a big factor so an artificial increase in demand might drive the price high. After everything starts settling a little bit, the artificial growth goes away since it is not something 100% sustained on a solid enough foundation.

The Binance hack

As some of you might know, this week was a hack on crypto exchange Binance resulting in the theft of approximately 7000 BTC. This was worth around $40 million at the time the hack happened. In order to put into perspective the impact this week has had, now (few days later) they would have been worth more than $55 million!

This hack has become quite controversial on the internet, and some people have even thought about conspiracy theories (read more). These theories have emerged mostly given the fact that Binance is known for its KYC procedures, which are very exact and clear. If you want to learn about KYC in the crypto world or understand what it is in general, feel free to read the article I have written a while back using this link.

Despite these bad news, apparently the public didn’t react very rationally. The increased demand continued to be present in the market and FOMO made the $8000 run possible, although a resistance followed up.

The Tether saga

Another “legal” issue that appeared is the Tether saga. In order to introduce some context, Bitfinex allegedly covered up an $850 million loss (that happened a few months ago) with giving itself access to $900 million worth of Tether’s reserves, from which the cryptocurrency exchange took at least $700 million. Unfortunately for the defendants, this is not happening in totally clean circumstances. The plaintiff’s investigation lead to $850 million of corporate and customer funds that Bitfinex sent to a Panamanian company called Crypto Capital Corp, a payment processor that is “holding” funds of other cryptocurrency exchanges. This is clearly not great, as the company Crypto Capital Corp is also supposedly holding the funds of QuadrigaCX, an exchange whose CEO died suddenly and mysteriously and afterwards reported a loss of $190 million.

I don’t know how people see this, but this totally hints illegal activity, in my opinion. It’s the justice system’s job to reveal who is the guilty one this time. Even though I am not entirely placing my hopes in this happening, I would really want this to not turn into a “justice doesn’t mean the bad guy goes to jail, it just means somebody pays for the crime” case. You can read more about the company’s situation here.

Friday resistance

To sum up this week, Friday has shown double digit losses after many days in a row with double-digit (or close to) gains. This resistance, which followed the $8000 run, is completely normal, and I don’t have too much to worry about.

Now might be a good moment to enter the ticket for the $10.000 run. It is just an advice, don’t consider it a guarantee this will happen too soon.

Conclusions

To draw some conclusions, I am looking backwards and forwards.

Looking backwards, I see how the last few months have been a crypto winter indeed. Everything seemed frozen. Everybody forgot their former perception about the market. Dynamic and volatility. What is your fortune today, might be your loss tomorrow. Now, it is safe to say that we are slowly approaching good days. I love the idea of going back to normal. But being dynamic means not getting to used to it.

Looking forwards, I see a bright future. I see a new period of prosperity in this market. And I’m sure you are looking for that as well.

Anyhow, if you want to add something, feel free to leave a comment below. If you want to get in touch with me personally, use this link.

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