Not too long ago, bitcoin fell below the $30,000 mark and was trading for about $29.5K. The world’s number one digital currency by market cap was in a position that caused many people to feel extreme panic and talks of a crypto winter were once again meandering throughout the space.
Bitcoin Is Bouncing Back and Analysts Say They Weren’t Worried
However, the price appears to have rebounded somewhat, and bitcoin is back up to about $34,000. This is a near $5,000 price jump in just a matter of days, and many financial experts are emerging to say they were not worried about the recent implications. Willy Woo, for example, is a well-known crypto analyst who explained in a recent interview:
We are far from a bear market. Only traders are freaking out over technicals seen on exchanges like volumes and price action.
Many have sought to compare the recent price dip to the one that occurred in the year 2018. During that time, bitcoin was experiencing heavy losses after hitting an all-time high of approximately $20,000 per unit in late 2017. 11 months later, the asset had dropped to about $3,500 and lost more than 70 percent of its value.
Many analysts believe, however, that the circumstances of this drop and the one that occurred three years ago could not be more different. Several of them point to the idea that billionaires and institutions have since turned to bitcoin to not only place the currency on their balance sheets, but to diversify their own individual portfolios. This was behavior rarely witnessed three years ago, and bitcoin’s reputation as a hedge tool appears to have grown substantially in recent months.
One of the reasons for the recent BTC drop has to do with China and its continued crackdown on bitcoin and cryptocurrency miners. In a statement, Darin Feinstein – founder of Block Cap – explained that China tends to make moves like this every few years and while it is likely to hinder BTC for a while, things will eventually recuperate as several miners are leaving the country in search of a more promising and accepting region. He says:
Recent news on the China mining shutdown is very reminiscent of China every few years. They have banned banks from using bitcoin, but this is different. I have never seen an exodus like this before.
China Tends to Do This a Lot
Similar sentiment was offered by Jason Deane, an analyst with Quantum Economics. He mentions:
Much of this downward momentum in bitcoin’s price has been ascribed to China’s latest moves with mining that have led to a lower global hash rate. While long-term bitcoiners view this as an extremely positive move for the network… short-term traders are spooked by uncertainty… Markets are often driven by momentum which can sometimes overwhelm fundamentals, and the current sentiment seems to reflect that this is what we are seeing.