Bitcoin is sliding, again. What's causing the drop?
Another week, another dip for bitcoin.
In the last 24 hours bitcoin has dropped about $1500, and it has dropped about $2500 from it's highs of a few days ago.
This is coming on the heels of relief rally that saw the coin get near $12,800 after it's plunge all way down near $9,000 just a week ago.
(Source: https://www.coinbase.com/dashboard)
What is causing the drop?
It isn't entirely clear what is causing the drop, like is often the case with cryptocurrency price swings.
However, there are some likely potential possibilities that are contributing to the weakness...
For one, an analyst went on CNBC and claimed that he thinks bitcoin is going to lose 90% of it's value from current levels, this year.
He is calling for a drop down to $1,000-$3,000 by the end of this year.
Then of course every major news outlet is running with that headline which is only spreading fear among an alreadly visibly shaken investor base.
Then you have South Korea announcing that they will be taxing cryptocurrency exchanges.
Which shouldn't be that big of news by itself, because any company that is earning money has to pay taxes, but perhaps some of these exchanges are needing to lighten up their crypto inventories in order to spring for the cash needed to pay these taxes?
That is something that wouldn't surprise me one bit and something that is probably happening.
(Source: https://www.investors.com/news/bitcoin-renews-sell-off-as-south-korea-clamps-down/)
Another point to consider is the seasonality aspect.
I wrote a post on the seasonality aspect a few days back, it can be seen here:
Basically it underscores how the middle of the January has traditionally been a very weak point over the past 4 years, and then how the beginning of the year overall has been a weak point compared to the rest of the year.
That is not a lot of data to go off of, but it's enough to see a trend.
My thoughts:
I think overall, we are just in a very weak point in terms of seasonality, in terms of the price running up so much so fast, and the news turning decidedly bearish over the past few weeks, that it will be hard to gain any kind of upward momentum in the short term.
Given that environment, it doesn't take much to cause already jittery investors to hit the sell button.
However, I think a few weeks from now, perhaps a few months, prices will be higher than where we are today, across the board.
Stay informed my friends.
*Image courtesy of pixabay.com
Follow me: @jrcornel
Might have to hang out on the sidelines until we get more confirmation of up movement or down movement. Looks like it could go either way at this point. Some people are saying BTC could drop to mid $8000's. If it went that low, I would definitely load up.
I take it as a routine task of bitcoin.It has been doing it since ages lol
Just relax and HODL.
Yes, I agree with some points which you have mentioned, definitely they are playing some role in the decrease of bitcoin's price.
Great explanation of the different reasons. I've written about this myself from a technical analysis point of view. Please check out my other posts. Just recently posted my prediction on Stellar Lumens (XLM):
https://steemit.com/cryptocurrency/@benkalashnikov/stellar-lumens-xlm-analysis-80-potential-profit
I hope you are right
wouldnt that be nice
The main idea is to collect as many bitcoins possible as in the near future the block reward is expected to be halved. While steam might be a good platform there are many others ways to stay well ahead in the crypto race . I shall be covering all crypocurunncices and the easiest ways to buy them. Thank you for your support. Have a blessed day!
Yeah, I mean it cannot go up forever.. Needs to have corrections.
https://steemit.com/bitcoin/@crypto-king-pak/an-article-about-the-birth-of-the-four-most-popular-virtual-currency-cryptocurrency-or-digital-currency
just patience and hold... every january same story
Looks like a trend to me!
That's great! Thanks for the perspective!
Ahah indeed a matter of perspective
Great ! HODL
And every year this causes the weak hands to panic sell, making the dip worst. I remember panicking on a dip in 2013 and selling out all my BTC. Every last one of them, like an idiot.
Needless to say, I learned. Got back in, and didn't panic sell at any of the following dips or crashes. This feels pretty normal to me now, but it's always sad to see the people who can't handle it. I agree with @jrcornel, I expect BTC and most of the crypto market to be up within a few weeks.
2013???? You are like a dianosue to me. I got into bitcion fairly recently
Yeah I'm still out of Bitcoin ;D
Looking for babies like Salt, Komodo and Enigma to invest.
All of those are great coins to hold! I personally also have Enigma and Salt! :)
The main thing is it gives me perspective when I see the market acting crazy. Yeah it's much bigger now than it was but it's not like the Bitcoin market has never been crazy, you know?
Formal education will make you a living , self education will make you a fortune.
I sold 5 BTC back in 2015 so I could buy a new keyboard.
This is my first January as a crypto investor, so it’s interesting to see the new year trends!
Is there a possibility for bitcoin to go to 0 ?
no, because 0 would mean its free, and everyone would want it if its free, so the price would go up.
I understand what you mean now , thank you for helping .
Yes! My Bitcoin is 0
Just hold lol
Ahah indeed a matter of perspective
Just FUD everywhere.
I personaly HODL EOS. yep. it is good.
Indeed
Fantastic graph
I dont think the chinese watch cnbc and their analysts from the world of the last century
well said!
it's a hardtime for crypto... hope will end soon
The mainstream does a great job at spreading fear! I saw an article similar to that, but was only 8-10 sentences long. It was laughable that they put that on credible news sites.
I think we will see weakness for a little while longer, but don't think $1,000 or even $3,000 is in play this year.
I could see $6,000 - $8,000 though
Agreed. I don't think those numbers ($1k-$3k) are in play unless there is some fundamental change in the current environment, which there very well could be. If things stay roughly the way they are, I don't see much below $8k to be honest, though I usually tend to be overly optimistic. ;)
I am the same way! I think it is human nature to be optimistic. Unless a new technology replaces blockchain here soon..
LOL @ "credible news sites"
There is not such thing these days. Every so-called news organization is a propaganda outlet with an agenda these days. Just look at the FUD that Bloomberg has been putting out when it comes to cryptos. Bloomberg should be renamed to FUDberg.
That was the kicker! :D
I found it: it is quite funny actually!
https://www.marketwatch.com/story/bitcoin-could-fall-off-cliff-drop-90-one-wall-street-strategist-warns-2018-01-21
And what they're saying is there is no demand... at all.. below the current point to match the desire to sell.
That requires some serious mental gymnastics.
Great article, @jrcornel. I hadn't considered the SK sell-off to pay taxes.
Yes sir. Strap in for a wild ride.
I’m debating on pulling out my money now and buying in at the bottom. Ive seen a lot of suggestions that it could get to $7000. We will see though. The fast run ups always cause steep drops
You are correct about that! It never hurts to take some profits at the table
Very helpful analysis, calm and optimistic but cautious. That echoes my sentiment very closely. I am not selling anything.
Good luck everyone.
hold
Is it possible it’s got anything to do with the lock down with the America government? Cheers mike
Let’s hope it is just seasonal. Thanks for cloning my blog about the CNBC pundit expecting a 90% drop. I think he is an idiot.