Bitcoin has dropped 11.5 times over the last week, presumably due to a lack of constructive catalysts joining the image and China’s new digital asset exchange crackdown. It fell slightly below the $7,000 psychological level and was hovering about $7,117.
Bitcoin Selling Pressure
Stepping back, the blockchain raced near $7,350 by selling pressure on November 24 and dropped near $6,500 on the next day to six-month lows. The decline, however, was short-lived. Prices rose quickly to $7,380 before a closing was posted at $7,159 on November 26.
Many believe the current downward trend is caused by a $49 million crypto fraud at the South Korean exchange uPBit. The fraudulent act caused a loss of $50 million in Ethereum. According to the exchange, transfers of stolen ether have been made to an unknown bank.
It’s not all doom and gloom for cryptocurrency holders in bitcoin. Awareness for the cryptocurrency continues to grow as high profile organizations such as Facebook ignite the interests of millions in blockchain technology and cryptocurrencies. It has been a long tie since any real zeal in a product was felt by consumers. The likes of Steve Jobs and Elon Musk have created companies with monumental social credit. Their organisations keep things simple, ensuring scalability. Most cryptocurrency products do not.
Trading companies like Bakkt and Fidelity Digital Asset Services (FDAS) are beginning to see market momentum. Retail sales in bitcoin are also on the rise in the popular Square user app. Also, the planned halving of next year’s mining bonuses bodes well on the supply side as it will reduce the amount of fresh bitcoin pumped into the market on a daily basis.
The Pendulum Swings?
As of the latest all-time high of $20,000 in December 2017, the hash rate, an indicator of how much computing power is dedicated to the bitcoin network, has doubled. Institutions are selling to compel weaker hands to exit, making it possible for larger funds to buy BTC at lower prices before the expected halving in May 2020.
The last two weeks of cryptocurrency sliding prices have all tried to predict how the markets will move forward. Speaking on Twitter with Adamant Capital Tuur Demeester’s founding partner, trading veteran Peter Brandt believes there will be a big drop in BTC prices before the next bull run.
Despite dragging down crypto values like BTC, fans of cryptocurrencies were watching for whales. According to the Whale Alert Twitter account, a whale moved moved 44,000 BTC ($314 million) in a single transaction on Saturday, November 24. Digital currency fans have for months now kept their eyes focused on whale activity.
Some analysts believe that at the moment the business remains unpredictable because nobody has identified a trigger. “There doesn’t seem to be a clear sell-off catalyst, but it comes after a time of continuing market uncertainty and we see traders starting to look at the year-end and closing positions they’re unsure about,”
Experts Confident in Bitcoin
Given the dramatic fall in prices, influencers in cryptocurrencies and heavyweights assume the values for digital assets would rise higher. Changpeng Zhao, Chief Executive Officer of Binance, recently explained that when you look at the underlying innovation and a longer-term outlook, over a five-year or ten-year period, the market will grow bigger and higher prices will occur when the industry gets bigger.
Bitcoin investor and venture capitalist Tim Draper still believes that his $250k BTC forecast will come to fruition. Discussing the topic at the AI & Blockchain Summit in Malta, Draper said: “I think Bitcoin payment processors will really open the floodgates.”
A group of researchers have come up with what they believe to be a simpler and more energy-efficient way to mine bitcoin that might mean that the previous bitcoin price floor drops even lower.
Technical Challenges
For some time, the huge energy costs of Bitcoin have been a concern for the crypto industry. Cambridge University researchers found that Bitcoin consumes more energy this summer than Switzerland as a whole.
Research reveals that the global bitcoin network needs more than seven gigawatts of electricity. This adds up to about 64 terawatt hours of energy consumption over a year. These realties make it almost impossible to imagine a future of scalable cryptocurrencies. For this reason, many continue to assert that the cryptocurrency markets aren’t worth a shoot.
Hopes at Bay
If the cost of bitcoin mining moves down due to a change in the optical job evidence, the price of bitcoin could fall below the $3,000 it fell to 12 months ago when miners were forced to switch off their machines.
Realistically, bitcoin is more likely to form a bearish engulfing candle, as prices generally consolidate near lows after a remarkable sell-off for some time. This is because investor trust tanks need time to recover during a bear market. All-in-all, the crypto is likely to trade between $7,500 and $6,500 over the next few days with gains above the 10-day downward moving average.
Edel is an Editor with a decade of print and digital media experience – specializing in Science, Technology, Finance, Entertainment, and Advertising. He is also a stock and cryptocurrency investor. When Edel is not editing or analyzing charts, you can find him with his DIY lightbox taking timelapses of plants.