the largest cryptocurrency by market capitalization, has seen its price hover around the $8,000 level over the past months. Now, it is on ...
the largest cryptocurrency by market capitalization, has seen its price hover around the $8,000 level over the past months. Now, it is on the verge of wild price swings, according to several experts, as outlined by Bloomberg.
A key technical gauge is indicating that the popular digital token may once again face dramatic volatility. The difference between Bitcoin’s upper and lower band in the Trading Envelope indicator is at its narrowest since mid-September, per Bloomberg. The gauge smooths moving averages to map out higher and lower limits. Last month, a similar situation in which the gap between the upper and lower band narrowed, was followed by a drop of more than 12% for Bitcoin on Sept. 24.
Facebook's Libra Woes
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"The volatility will pick up again,” said Matt Maley, equity strategist at Miller Tabak + Co. He points to major headwinds for cryptocurrencies, such as disappointments over Facebook Inc.'s (FB) digital currency project called Libra. Companies such as Visa Inc. (V) and Mastercard Inc. (MA) have excited the project, and now, CEO Mark Zuckerberg is testifying in front of Congress to defend it. “This issue with what’s going on with Libra and Facebook is a definite headwind, and it’s not going to go away,” Maley added.
A new bout of volatility would come after Bitcoin's price tripled in 2019 from its December lows and then plunged nearly 40%.
The central bank recently made a statement forecasting “high thresholds of legal and regulatory safeguards” for any global stablecoin.
“Brainard’s comments taken as a whole reflect an extremely cautious approach to stablecoins and the notion of central bank-sponsored online currencies,” said Nicholas Colas, co-founder of DataTrek Research, to Bloomberg. “That makes sense: The Federal Reserve backs the world’s reserve currency and has little incentive to put that title at risk with untested technologies.”
