The price of bitcoin – following several weeks of looking better – is now back in the doldrums and is trading for just over $40,000. This is a huge step down considering earlier in the month, the currency was trading for as high as $48,000, making many traders believe that another bull run was right around the corner.
Bitcoin Isn’t Doing So Good
To be fair, bitcoin is technically in a stronger position given that the asset was initially at around $39,000 a little earlier in the week. However, it appears the currency has somewhat expanded since then and has jumped into the low $40,000 range, but most analysts agree this isn’t something to be terribly pleased about. The world’s number one digital currency by market cap is in a low state, and there is no beating around the bush when it comes to the asset’s dropping price.
Collin Plume – CEO and founder of My Digital Money – explained in an interview:
For a while, $40K was a major resistance level. When the price of bitcoin hit $47K, it was natural for investors to want to cash out to make some gains, especially those who bought in during the dip… It will bounce around the $40K level… It will make several attempts to break $50K, and it will fail many times, but once it crosses $50K, it will pull back again before it jogs to $60K.
William Noble – chief technical analyst of research platform Token Metrics – also threw his two cents into the mix, commenting:
Bitcoin will likely become the dominant cryptocurrency between now and August. If interest rates continue to rise, altcoins may drop faster than bitcoin. A measure like bitcoin dominance has bottomed. BTC dominance could go from its low near 41 percent to 47 percent. A move like this would be in line with the idea that bitcoin is going to be the only logical crypto to own as equities and bonds drop.
What Will Happen in the Coming Future?
Plume also provided his thoughts regarding the short-term status of bitcoin. He mentioned:
With taxes due in the next few days and the IRS having issues with new forms and legislation, many investors are in a holding pattern. Many bitcoin holders and consistent buyers are waiting to see where they are going to shake out for last year. Once they know, prices will jump again.
Bitcoin has been having a rough year in many respects. The asset was initially trading for $68,000 per unit just last November, a new price record for the king of digital assets. However, ever since 2022 came to be, the currency is struggling to make ends meet and keep investors pleased. Since the start of the new year, we have been privy to several drops and negative alterations to bitcoin’s price, and there doesn’t appear to be an end in sight.