The price of bitcoin has taken a nasty fall. At the time of writing, the currency has dropped by roughly $1,000 in the past 48 hours, bringing the price of the world’s number one cryptocurrency by market cap down to around $18,200. This is about five percent less than where it stood previously.
Bitcoin Is Heading to the Gutter
It appears the cryptocurrency space is being attacked from all sides as it’s not just bitcoin that has taken a nasty stumble. Additional currencies such as Ethereum, Ripple’s XRP, Chainlink and Litecoin have all fallen by about ten percent in the past 24 hours, leading to billions of dollars being wiped out in just a day or so.
Naturally, the biggest concern amongst most traders as of late is bitcoin and how much lower it can potentially go. With bitcoin continuing to sink into perdition, it’s likely other coins will follow suit. In addition, it’s likely that this may prevent bitcoin from potentially reaching the $20,000 mark that so many people were likely looking forward to before the end of the year.
To be fair, the bitcoin price initially fell by more than $2,000 after it first struck $19,000 in November. The currency couldn’t deal with the sudden rise it incurred and experienced a slight correction that really didn’t last that long. It was only a matter of time before bitcoin regained what it had lost and then some. Perhaps this case is similar, and bitcoin will move back up to $19,000 sooner than we might have anticipated.
Ray Youssef – CEO of Paxful, a peer-to-peer (P2P) bitcoin exchange – commented in a recent interview:
$18,500 to $18,600 is the line in the sand which will determine the next price movement with the price having the potential to range between $18,500 and $19,000. If the price breaks down, then we risk going as low as $14,000 to $17,000. Contrarily, $17,300 seems like the next area for buyers to step in on the down curve if the price drops bear. Hard to predict where it will go, but I expect a rapid bounce back even if it hits the bottom.
Could Things Eventually Turn Around?
This appears to be sentiment shared by several analysts. While bitcoin may be trapped in the doldrums for the time being, the currency is still likely to experience more bullish behavior in the coming weeks. Glassnode explained in a recent edition of its newsletter:
Bitcoin’s reserve risk [used to assess the confidence of long-term holders related to the price of bitcoin] is still low, suggesting that the bull market may just be getting started.
The drop comes following some positive news, such as MicroStrategy purchasing more than $50 million worth of additional bitcoin and pledging to raise about $400 million to add to its growing crypto stash.