Well, it looks like all good luck can’t last forever. Bitcoin, the world’s number one digital currency by market cap, has taken a serious stumble, having fallen back to about $33,000 at press time after spending most of the weekend trading at the $40,000 range.
Bitcoin Decides to Step Back
The currency has risen to unprecedented levels, and with these spikes comes some serious repercussions that are potentially coming in the form of a new selloff, which typically tends to happen whenever bitcoin reaches a new high. The asset makes a lot of its traders money, it makes them rich, but quite a handful of them are not content with sitting around for a while letting it endlessly grow. They feel the need to sell some of their units and rake in a little cash in the process, which ultimately prevents bullish trends from continuing a set path.
Simon Peters of e-Toro fame explained in a recent message to his followers that they shouldn’t be too worried about bitcoin’s latest behavior. He says that the asset is simply going through a correction and is still following the bullish patterns that have made it rather famous over the past several weeks. He says:
It’s important to put the price in perspective. Although we have seen a fall, bitcoin is still up from last week where it started at $30,000. After such a sustained and volatile rally, it is natural for an asset to see a selloff. Some investors may be selling out of position now anticipating a deeper correction in the future.
He has also stated that this doesn’t suggest the bitcoin price is crashing. Rather, it’s simply an opportunity for fans and traders to purchase more units at a lower price. He comments:
A number of metrics point to bitcoin [being] in bull market territory in 2021. The amount of bitcoin in circulation is low, indicating investors are moving bitcoin from exchanges to wallets, where they are looking to hold for the long term. This lack of supply has contributed to the recent positive price movements. Combine this with continued institutional investment, which has often driven the price up when we have seen monetary dips, and bitcoin remains in a positive place for 2021.
Overall, bitcoin has fallen by roughly 20 percent in the last 48 hours alone, while the entire crypto space has lost about $200 billion overall. Naturally, some out there are taking this as a sign that bitcoin is tumbling into dark territory and exposing itself as a sham currency.
Some Don’t Think Much of BTC
One of those figures is Mike Bailey, director of research at FBB Capital Partners. Discussing bitcoin in an interview, he mentioned:
If we’re just to compare it apples to apples with other commodities, it feels like a huge bubble and you could say it’s crazy expensive.
