New data suggests that investors are once again gaining confidence in bitcoin.
Bitcoin Is Back, Baby
The currency – which is often seen as a speculative asset – shed several points off its reputation during the past few weeks, though to be fair, the same can be said for many assets (i.e. stocks, oil, etc.) The coronavirus pandemic sent everyone into a solid panic, and people began selling off everything they owned in the hopes of gaining cold hard cash before the global economy suffered too much.
During this time, bitcoin encountered a nasty selloff that brought its price down from over $10,000 to the high $3,000 range. From there, it brought itself out of the doldrums and now appears to have settled between $6,600 and $6,700, where it’s been for the past few days.
While this price is certainly an improvement, there’s still a lot of room for growth, especially since last month, the currency was trading for nearly $4,000 higher. Maybe this newfound belief and love for the world’s number one digital currency by market cap can help to accomplish something great.
According to one source, the currency has risen by approximately 70 percent over the past two weeks. Technical charts – at the time of writing – suggest that the bulls are feeling very tired and hungry due to the recent struggles they’ve endured, yet analysts claim bitcoin is not in danger of another major drop. Worst case scenario is that bitcoin remains where it is for some time, though another spike is still possible.
Matthew Dibb – COO and co-founder of Stack – explains that the number of crypto deposits in digital exchanges has decreased significantly over the past few days. Typically, when on-chain transactions occur through exchanges rather than through privately held wallets, bitcoin gets a run for its money, resulting in weak ascension periods. Bitcoin usually blunders and takes a fall.
It comes as no surprise that deposits on digital asset exchanges have dropped by more than 30 percent, as investor confidence took a hit after the sudden price crash seen on March 13 and many short-term traders and investors sold off their holdings to cut off what they saw as potential for further losses.
Investors See the Value
Coin Switch CEO Ashish Singhal further claims that the reason more people are holding onto their bitcoin now instead of selling or trading it has to do with the idea that they believe in the currency’s viability. They see it as a long-term investment and believe in the value of hanging onto it.
And to be perfectly fair to bitcoin, it’s not like it hasn’t gone through situations like this before. Remember 2018? It was arguably the worst recorded year for the asset, yet it came back by summer of 2019, so perhaps bitcoin is stronger than some might imagine.