Bitcoin has taken a huge step back. While it was able to surpass the $33,000 mark yesterday and attain a new all-time high, it appears that the currency is now undergoing a bit of a correction. Either that or its recent spike was too much at once. In any case, the currency is now trading for just over $31,000, meaning it has lost about $2,000 in just under two days.
The Bitcoin Price Has Fallen a Bit
This is a major dip considering how strong bitcoin has been over the past few months, though to be fair, it’s not like we haven’t seen this before. Whenever bitcoin reaches new heights in a relatively short period, the next few weeks are always “graced” by a sense of confusion and low self-esteem… So much so that the asset can’t help but fall back to more familiar territory.
Overall, it looks as if this amounts to a 17 percent drop for the world’s most powerful cryptocurrency by market cap. It is the largest single-day drop since March when the coronavirus pandemic first entered our midst and began picking away at our financial markets.
Still, however, it appears the asset remains in bullish territory for the time being. Bitcoin remains above $30,000 for now, and let’s not forget that this is a currency that garnered as much as 171 percent in just the final quarter of 2020 alone. Even more impressive? The currency added 305 percent overall throughout the last 12 months, making it one of the most positive assets of the year.
Many industry experts agree that this is only temporary. Daniel Moss – an analyst with Daily FX – claimed in a recent interview:
The long-term outlook for both bitcoin and Ethereum remains skewed to the topside. However, both cryptocurrencies could be at risk of a near-term pullback as their respective surges appear relatively overextended.
What’s interesting is that Ethereum – which has been trading over $900 these past few days – has incurred another surge of roughly 22 percent and is now trading for over $1,100. It took bitcoin’s temporary demise to cause Ethereum to jump some more. It is now at its largest figure since 2018 and has put bitcoin’s jumps to shame, having surged roughly 600 percent in the year 2020.
But for the current time, it’s bitcoin that’s got everyone’s attention, and many are telling traders that while the asset has been doing quite well during these past few weeks, this should be a reminder that the asset is still relatively new and people shouldn’t get too used to the currency settling in the financial space anytime soon, as it still needs time to feel things out and control its volatility.
It’s Not Yet Settled In
Adrian Lowcock – head of personal investing at Willis Owen Ltd. – said:
Today’s selloff is a reminder that this is a relatively new asset, highly volatile, and still yet to find its place in the market.