Bitcoin failed to recover on Tuesday, despite the rebound of risky assets and stock indexes in the afternoon.
The reason for this dynamic was the new legislative initiative of the European Union.
The document prepared by the European Commission implements the initiative of the Financial Measures Development Group against Money Laundering (FATF) throughout the EU, prohibiting exchanges, wallet operators and any companies from accepting and sending digital currency transactions without full KYC personal data.
Read more: What is KYC & the registration procedure on the cryptocurrency exchange
In fact, the European Union becomes the first jurisdiction to adopt the FATF rules. The full approval of the law will take at least two years, but with the support of the EU, the initiative to de-anonymize crypto transactions will be unequivocally supported by developed countries at the international level.
Ruffer investment company sees the global reason for the fall of cryptocurrencies in the emergence of a price bubble due to the sharp winter growth of digital assets. The price of bitcoin had no fundamental grounds, the entire six-month trend was a hype, fueled by Elon Musk's tweets, the Coinbase IPO and the ups of meme cryptocurrencies.
Analysts at Bloomberg and Coindesk note that the collapse of BTC led to a breakdown of the 50-week moving average (MA). This is the third case in the history of BTC trading, the first two turned out to be the maximum acceleration of sales.
Mike McGlone of Bloomberg Intelligence believes that this time the breakdown of the 50-WMA will lead to a decrease in bitcoin to the level of $13,000, 80% below the maximum of this year. There is also the cost of cryptocurrency mining, which acts as a significant support during all periods of such significant price corrections.
The situation looks like the bullish trend is finally broken. Now the question of the fall of bitcoin up to $23,300, where it took a pause in growth before last Christmas, becomes relevant. It cannot be excluded that in the case of mass liquidation of margin positions, the price will even close the gap in the area of $18,000.
In general, such a turn of events will be a repeat of the "crypto winter of 2018", opening the possibility for a commensurate collapse of BTC with a "bottom" near $10,000, zeroing out the rally from October 2020.