The tumble comes days after U.S. President Donald Trump criticized digital coins on the heels of this year’s stellar rally. Trump wrote on Twitter Thursday that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” adding that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

Bitcoin “continues to trade lower as comments from President Trump put downward pressure on the cryptocurrency,” said Alfonso Esparza, senior market analyst at Oanda Corp. in Toronto. Drawing Trump’s ire means “it could fall further to $8,000, giving back all the gains made in June.” Bitcoin initially climbed after Trump’s comments, but has since more than erased the gains.

 

Eoin Treacy's view

There is a tendency in the opaque crypto market to attach causality to coincidence. I am not at all sure how much credence to give the conclusion that President Trump’s tweets were behind this weekend’s sell off.

In the wild and woolly world of crypto trading just about everything that is frowned upon in regulated markets is permissible. That includes dumping supply over the week so it can be bought back cheaper on Monday. In comparatively small illiquid markets that kind of activity contributes to outsized moves.

Bitcoin’s staircase step sequence of one-month ranges, one above another, has persisted since April and remains in place. A sustained move below $10000 would be required to question the consistency of the advance.

Ethereum pulled back violently in sympathy with bitcoin and bounced from the $200 area which represents the upper side of the base and is not far from the trend mean. It will need to continue to hold that level if recovery is to continue to be given the benefit of the doubt.