Cryptocurrencies have plunged to new depths on Wednesday as the Crypto Crash of 2018 has now surpassed the Dot-Com crash we saw in the year 2000. The MVIS CryptoCompare Digital Assets 10 Index is 80% lower than its January high.
Cryptocurrencies have been under pressure over the last week and Bitcoin is testing a key support level. The Goldman Sachs report sparked the selloff we saw in cryptocurrencies last week and it seems that more unwelcome news has just surfaced.
A U.S federal judge has just ruled that Initial Coin Offerings (ICO) are covered under the securities law. This is seen as a victory by regulators who have been pushing for cryptocurrencies to be regulated much like stocks.
The chairman of the Securities and Exchange Commission (SEC) has also said that the fundraising method of ICOs should also be regulated as the market has become rife with fraudulent activity.
Peter Henning, a law professor stated that - “This ruling affirms the SEC’s position that it has authority over ICOs and that market manipulation and anti-fraud provisions in the law apply,"
In this not you will find the technical chart and summary of possible price movements looking forward:
Looking at the chart of Bitcoin
By looking at the chart below we can see the selloff highlighted in grey and is currently testing a key support level. If we see the $6120 support level not holding, then I would expect short sellers to enter and drive the price even lower. We might even see a short-term recovery but at this stage the main trend is still down and trading below the 50-day moving average (SMA).
Chart Source: MetaTrader 5
Looking at the chart of Etherium
The alt coins have also been feeling the brunt of the selloff with Etherium leading the way with a significant move lower as of last week. Looking at the chart we can see the price action is still in a downtrend and trading below the 50-day simple moving average (SMA).
The price action is approaching two key support levels at $147 and $106 per coin. We might see a short-term recovery as well on Etherium but this rebound might be short lived.
Chart Source: Metatrader 5
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