Bitcoin is ending the week with another dip added to its roster. The currency – which less than 24 hours ago was trading in the low $40,000 range again – has fallen by about $5,000 at the time of writing and is now trading for just over $35,000.
Bitcoin Has Experienced Another Major Slip
With the first few weeks of January in the books, it appears bitcoin is having difficulty making up its mind about where it wants to be for now. Initially, the currency hit a new all-time high of roughly $40,000 during the first moments of the month, though for the most part, it’s had a hard time retaining this position, with several major dips now under its belt in the new year.
This is rather discouraging to most traders and analysts alike, with many members of the latter category claiming that 2021 would somehow remain a bullish year for bitcoin. To be fair, we are still early in the year, so it would be incorrect to assume that the patterns of the last few days would somehow be reflective of the currency’s coming weeks, though it’s never a good sign to see bitcoin so indecisive regarding its place on the financial ladder.
This is now the second major dip that bitcoin has experienced in recent days, with the first taking bitcoin down by roughly $7,000. Following that slip, the asset didn’t take much time to recover, so it’s certainly possible that bitcoin will follow suit after this fall, though now it’s a matter of waiting and watching.
Some industry experts are claiming that the recent price swings have to do with Wall Street’s sudden involvement in the crypto space. They claim that many Wall Street firms are beginning to fawn over companies and startups that are somehow involved in digital assets, though the fact remains that many of these firms understand little when it comes to crypto. They are getting involved simply because it’s the thing to do, and this is not giving the crypto space the real support it needs.
Michael Every, a global strategist at Rabobank, explained in a recent interview:
Wall Street just drools over the word ‘crypto’ any time it sees it without understanding any of this at all. It’s not a surprise Wall Street does so, as anything that shows an exponential price increase would get their interest.
In addition, many technical analysts are having a hard time predicting if bitcoin will fall further or potentially rise in the coming weeks. Only recently, they claim, did signs appear on many technical charts suggesting that bitcoin was being overbought.
Let’s Not Drop Below This Level…
Craig Erlam, senior market analyst at Oanda Europe, states:
While $35,000 may provide an interesting test, the only level that really matters is $30,000. A break of this could trigger a much sharper correction.