Morgan Stanley Analysts Question The Bitcoin Rally |

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Morgan Stanley Analysts Question The Bitcoin Rally

Bitcoin is falling

At its lowest point on Thursday, bitcoin sank to $2120 levels on the Bitstamp exchange, a fall of about 29% from the intraday highs hit during the start of the week. However, buying emerged at the 50 day EMA and the digital currency recovered most of its losses and ended the day down 1%.

“Many investors seem to be using the very recent rally as an opportunity to take some profits while they evaluate the market after the largest spike in price, volume and interest that we have ever seen,” said Alex Sunnarborg, research analyst at CoinDesk, reports CNBC.

Coinbase down for more than four hours

Along with the sharp fall in price, the outage in the popular exchange Coinbase added to the trader’s woes. Coinbase was offline for more than four hours and it blamed “sustained traffic” in both bitcoin and ethereum as the reason for the crash on its website and app. The traders were stuck with their positions as they could neither buy nor sell during those four hours. This shows that the cryptocurrency exchanges are still not as reliable as the traditional exchanges.

Morgan Stanley again raises question on the vertical rise of the cryptocurrencies

Analysts at Morgan Stanley raised questions on the spike in prices without any significant improvement in the cryptocurrencies fundamentals.

“Market likely getting ahead of itself as we have not seen exponential rise in use case yet, but value is rising exponentially,” Morgan Stanley analysts wrote in a note Wednesday, reports Fortune. “Their values are too volatile and too hard to actually use for payment for most to consider them currencies,” they added.

After all, there has been a slew of negative developments like the dragging bitcoin scaling issue and the SEC’s rejection of the Bitcoin ETF that are bearish for bitcoin.

“The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency,” another group of Morgan Stanley analysts wrote, in a note titled “Blockchain: Unchained?”

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