Bitcoin Falls To $9,000 But Don't Expect Gold Price To Benefit - Analysts
(Kitco News)- The bottom continues to fall out of bitcoin as prices dropbelow key support levels but analysts don’t see the renewed weakness helpingthe gold price retest its recent highs.
Thursday, bitcoin continued to make waves in financialmarkets as the price dropped below $10,000 with analysts expecting to see lowerprices in the near-term. Last trading at $9,129, bitcoin is down 54% from itshighs seen mid-December.
“I am targeting $8,600 in the near-term as the next majorsupport level,” said Bill Baruch, president of Blue Line Futures. “I think youare seeing a rotation in cryptocurrencies and I think eventually bitcoin willbe left behind as it doesn’t fit the new marketplace.”
Baruch added that the selloff is picking up speed because ofpanic sellers who bought the digital currency near the December peak.
Todd‘Bubba’ Horwitz, chief market strategist of BubbaTrading.com, said that healso thinks that bitcoin will continue to fade away as the cryptocurrencymarketplace continues to evolve.
“Bitcoin has had a nice run but it’s too expensive and thetransaction fees are too high to make it a viable currency,” he said. “But thecryptoworld is real and it’s here to stay.”
Jim Wyckoff, senior technical analyst at Kitco.com said thatthe market is seeing major technical damage as prices push to a two-month low.
“Thissuggests another leg down in prices in the near term. Bitcoin-U.S. Dollarremains in a firm price downtrend on the daily chart,” he said in a reportThursday.
Whileanalysts noted that bitcoin’s rise to $20,000 took some shine off gold, thedownside isn’t likely to help the yellow metal.
“Idon’t think you can pin bitcoin and gold together because they are fundamentallydifferent assets,” said Baruch. “You can’t compare bitcoin really to anything.If bitcoin was correlated to gold then prices would be higher on the back of aweaker U.S. dollar.
However,Phillip Streible, senior market analyst at RJO Futures, said that bitcoin’smore than 50% drop should put to rest the debate that the digital currency is asafe-haven asset comparable to gold.
“Bitcoinis done and going to zero, either you are going to hold on or you are going toroll into other assets like gold,” he said.
Accordingto some analysts, bitcoin investors are starting to panic as countries look toregulate the cryptocurrency. The Indian government is the latest to jump intothe regulation debate.
Ina recent speech, Arun Jaitley, India's finance minister said that thegovernment doesn’t recognize cryptocurrencies as legal tender, “will take allmeasures to eliminate use of these crypto-assets in financing illegitimateactivities or as part of the payment system."
By Neils ChristensenFor Kitco News
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nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.