Bitcoin has crashed again. The world’s number one cryptocurrency by market cap is now trading in the $10,300 range, meaning it’s roughly $2,000 less than where it was just a week ago when it rose beyond the $12,000 range.
Bitcoin Has Fallen Even Further
What could have caused bitcoin to fall so suddenly? Why now, and why such a big drop? Clearly, bitcoin wasn’t happy just falling back into the $11,000 range. It had to retreat further and lose all its gains since the announcement that banks would offer crypto custody services to all their customers. This was huge and was likely what kept bitcoin above $11,000 for so long.
Unfortunately, we’re witnessing a string of behavioral patterns that are quite similar with what we all viewed at the end of 2019. As many of us remember, bitcoin was trading for as high as $13,000 by the time late July of that year rolled in. However, by September, the currency had dropped into the mid-$9,000 range, and just a few “moments” later, the currency lost roughly all of its gains over the past several months and fell to roughly $8,100 after the institutional crypto trading platform Bakkt failed to make any sort of immediate impression on the trading market.
We’re now seeing the same behavior. Bitcoin rose to a high point in 2020 during the summer. Everyone got excited and enthusiastic about where the currency would go and what would happen from here. Sadly, the asset has lost a good chunk of its value in a relatively short amount of time. From here, it looks like bitcoin is preparing for further drops considering it has fallen by more than $500 over the past 24 hours and about $600 from the day before.
Bitcoin is incurring losses of several hundred dollars from one day to the next. In 2019, the news surrounding Bakkt did nothing to ensure that bitcoin would remain at an annual high, while this year, news of the bridge being crossed between centralized and decentralized finance has lost its stability.
Will Additional Drops Occur in the Coming Weeks?
At the same time, however, it can be suggested that bitcoin’s losses have something to do with the asset’s correlation with stocks somehow getting stronger over the last few days. It is widely whispered in the crypto world that stocks and crypto often move together, and with the Dow Jones incurring a drop of more than 800 points just yesterday afternoon, it makes sense that bitcoin would follow suit.
The big question now is whether bitcoin will stop where it is or if further drops will occur. Could $10,300 become 2020’s “$7,000?” As we remember, this is around where BTC wound up at the end of 2019, so perhaps the coin is looking to take a similar path now that we are getting closer to ringing in 2021.