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Bitcoin Bloodbath After Goldman Sachs Scraps Plans for Crypto Trading Desk

The world’s largest cryptocurrency, bitcoin, has lost 15 percent of its value since Wednesday morning. The crypto bloodbath has also taken 25 percent off ethereum. Dramatic declines began after reports indicated that Goldman Sachs is to scrap plans for a crypto trading desk.

Per the Business Insider, Goldman Sachs is to scrap plans to launch a cryptocurrency trading desk due to regulatory uncertainty. The bank had initially scheduled a desk launch for this summer.

Investors have been shaken by the bank’s reversal, as has the market for bitcoin.

The past twenty-four hours have brought about a further 10 percent decline in bitcoin, which now trades at levels near $6,300—that’s a 15 percent decline from Wednesday’s peak of $7,404.

Falling faster and harder is ethereum. The world’s second largest cryptocurrency has fallen from $283 to a one-year low of $211—a 25 percent fall—following the Goldman Sachs announcement. Other important cryptocurrencies, including XRP and EOS, have also been hammered.

With massive retail involvement already, crypto traders had been hoping for a wall of institutional money to drive the markets higher, and now those hopes, it seems, have been dashed.

“A lot of retail investors’ hopes for a bigger institutional presence were really being driven by Goldman Sachs. This is just a negative, negative sign as far as liquidity goes,” said Oanda’s Stephen Innes on Thursday.

Unlike some of its peers, bitcoin at least remains above recent lows, with massive support in place at and slightly below $6,000—a level that has been in play for much of this year.

Should $6,000 falter, it would be anyone’s guess how low bitcoin could go. One man who thinks he knows is FxPro’s technical analyst Alexander Kuptsikevich. Given the compression that has taken place in the market, evident from the sequence of lower and lower market tops since bitcoin traded near $20,000 last December, Kuptsikevich believes that a break of $6,000 precedes a rapid decline to $3,300.

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Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
 
 

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