At the time of writing, bitcoin has experienced a major hit. The currency – which during the early weeks of January reached a new all-time high of more than $40,000 per unit – is presently trading for just over $30,000. This is a slight improvement over where it stood during the early morning hours, but it’s still quite a dip considering where it was trading on or around January 8.
Bitcoin Just Keeps Falling
As a result, many analysts are expressing worry that 2021 will exhibit the same bearish trends as 2018. During that time, the price of bitcoin fell from its then all-time high of more than $19,000. Within months of the new year, the currency had fallen to less than half that price. During the summer, it was trading for around $6,500 and by Thanksgiving, the currency had taken another nasty dip that saw it trading in the mid-$3,000 range.
Will 2021 be the same case? While it may be too early to tell (we haven’t even stepped into February yet), the currency is already exhibiting some of the same bearish behavior that got everyone up and running for the hills three years ago, only this time, there is potentially more to lose. Reaching $40,000+ was no easy feat, and according to JPMorgan, the idea of bitcoin hitting this number again in the coming future is rather unlikely, so the question is, “Are the glory days of bitcoin far behind it?”
The good news is that while the price of bitcoin is suffering somewhat at press time, the asset is still heavily up when compared with where it was just four months ago. Last September saw the currency trading for around $10,000, which was a bit of a slip from where it had been during the previous month. However, the currency managed to remain in five-figure territory and today, the asset – despite the recent dip – is still up about $20,000.
Thus, many long-term investors don’t feel too worried about the situation at hand and acknowledge that they still have quite a bit to show for their confidence in bitcoin. Still, this isn’t stopping analysts from predicting where the current correction will take bitcoin. Matthew Dibb – COO and co-founder of Stack Funds – explained in a recent interview:
From a technical analysis point of view, it is consistently making lower highs. The short-term momentum indicates a possible slide to $26,000.
The Fed Could Get in the Way of the Currency’s Success
Later this week, members of the Federal Reserve board are set to hold a private meeting. Analysts are worried that this could potentially lead to further bitcoin price slips. Edward Moya of Oanda fame mentioned his concern and stated:
Bitcoin seems poised to consolidate a little more, but if the Fed is not dovish enough and the dollar rebounds, the $30,000 level could easily break.