At press time, the father of cryptocurrency has ultimately fallen to just over $4,100. This is a $100 drop from our previous price article, and it appears the cryptocurrency crash isn’t coming to a halt anytime soon.
We’ve discussed the bitcoin cash hard fork that took place just over a week ago, and how its implications could have potentially caused the sudden drop in bitcoin’s status. However, what we haven’t discussed is the traditional stock market. While we’ve mentioned in the past that bitcoin tends to mirror the activity of the Dow Jones and the NASDAQ, it has recently come to light that virtually all the year’s gains have been wiped off the slate, meaning we’re now right back where we started in January.
Chart by Tradewonk
An entire year of progress has gone by, and yet it feels like virtually nothing has been cemented in stone, and bitcoin is no stranger to this scene. The currency has seen all its gains disappear from last December when it peaked at nearly $20,000 per unit. In total, the price has fallen by nearly 80 percent in less than 12 months.
Jani Ziedins – analyst at Cracked Market – says one of the big problems is that nobody is around to purchase new bitcoins anymore. She comments:
“Everyone who still believes in cryptocurrency bought all they could afford months ago and now, there is no one left to buy.”
What we’re seeing is drops in virtually every market, both national and international. One of the biggest factors contributing to the falls may be plummeting oil prices, where supply is outweighing demand in major economic regions like the U.S. and China. Both countries are now the home of standoffs (with each other) and selloffs.
Lukman Otunuga – research analyst at FXTM – states:
“The truth of the matter remains that rising global crude supply coupled with worrying signs of slowing demand have written a recipe for disaster for the oil markets. With an appreciating dollar rubbing salt into the wound, the outlook for oil prices points to further downside.”
It’s an upsetting scenario, though not everyone is convinced that the future is automatically negative. Some analysts – like Omkar Godpole – suggest that bitcoin is potentially readying itself for another price rally, and that we may soon see recent losses turn themselves into gains given the appropriate circumstances. He says:
“Repeated defense of the 200-week EMA likely indicates seller exhaustion. A break above $4,635 would confirm a double-bottom breakout on the 4-hour chart and could yield a stronger recovery rally to $5,100. A weekly close on Sunday (UTC time) below the 200-week EMA of $4,182 could prove costly, as the next major support is located directly at $3,100 (200-week simple moving average).”
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