Hi folks,

Bitcoin prices was down today to USD7300-levels. Federal prosecutors are working with the commodity futures trading commission to probe on bitcoin price manipulation.

The investigation is focused on illegal practices that can influence prices — such as spoofing, or flooding the market with fake orders to trick other traders into buying or selling. More news can be found in below link.

https://www.bloomberg.com/news/articles/2018-05-24/bitcoin-manipulation-is-said-to-be-focus-of-u-s-criminal-probe

Viewpoint

Price manipulation in the cryptocurrency space is unavoidable as the market has not matured. This explains high volatility and with high volatility comes incentives for people to manipulate the prices. Once the cryptomarket has matured this trend will disappear.

Price manipulation is evident not only in crypto but in emerging small-cap stock markets as well and is a destined path any asset class will have to go through from infancy to maturity. This is no cause for panic.

It is clear common sense that there is price manipulation in cryptocurrencies and a federal probe into bitcoin is effectively not necessary because the answer is obvious.

Investors should be aware of the fact when they enter into bitcoin or other digital currencies, that there are crypto whales who could manipulate these prices .Even if the verdict is true that bitcoin prices are manipulated, so what , it may imply stricter regulations on bitcoin trading which most would have see it coming and in long term is good for bitcoin and cryptomarket.

This has been a long discussed topic and market is already pricing that in as seen in recent correction. Thus I see the news as non-detrimental and it make sense to buy some bitcoin now if you are a hodler.

Trading strategy for bitcoin

However, if you are a trader, it may make sense to hold on to your purchase.

This is the price chart for the last 3 mths. If we look at the charts, bitcoin price has not break out from the descending trend. ,we note bitcoin prices form a head and shoulder patterns, to reach a lower high each time and a lower lows with the lowest trough in april at around USD6600 levels.

Based on fibonacci retracement it has broken price support level at USD7.7k. This also represent, there may be a potential, bitcoin will test new low. The next support is around USD6700 level and if that is breached, we may possible see bitcoin reaching USD6,000.

In my viewpoint a good purchase price will be at USD6,800 level slightly above the next support level.

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