Let’s start off our day with some good news. Bitcoin, the granddaddy of all cryptocurrencies, has recovered somewhat over the past 24 hours and has shot back up to the $8,000 range. At press time, it is currently trading for about $8,051.
While it hasn’t recovered fully since its recent drop to $7,600, it’s nice to see that volatility isn’t as strong as it was a year ago. Bitcoin, for whatever reason, fell victim to harsh market circumstances that caused it to fall to $7,400 by the mid-week. The consensus was that a massive sell-off occurred after the currency had briefly hit the $9,000 mark for the first time in over a year. Many investors, particularly major bitcoin holders, decided to sell either all or part of their stashes to earn a quick buck.
This completely goes against what bitcoin is all about. Bitcoin and other cryptocurrencies are an investment. Unless you’re going to use the digital asset to pay for goods and services, which is what it was originally designed for, one should always allow bitcoin and its digital cousins to grow, which is what makes these sell-offs so devastating.
They are particularly hazardous to the crypto environment granted they occur at the hands of whales. These figures not only hold large amounts of crypto in their accounts, but they do not store this crypto on exchanges like a standard trader. They instead rely completely on digital wallets, and when they do transfer their funds to an exchange, things can become very wary and drops – sometimes big ones – are likely to occur.
Such is the case this week, though at the time of writing, bitcoin has added a full $600 since that initial drop, and it’s a positive sign that bitcoin is doing all it can to remain above the $8,000 mark.
However, both $8,000 and $9,000 are proving to be rough resistance levels for bitcoin. While it has already surpassed the first level, analysts are warning that the currency will need to work extra hard to pass the $9,000 line if it doesn’t want to be overtaken by the bears again.
There is better news in the sense that bitcoin is scheduled to undergo another halving in early 2020, which one expert says can cause a stronger price boom. From there, we could probably expect bitcoin to spike further as it did in 2017, which means it will be less vulnerable to outside (negative) market influence.
For now, however, bitcoin must learn to do something with what it has. It has passed $8,000 again, and it must do all in its power to at least maintain this present position. Otherwise, it runs the risk of repeating some of 2018’s less-than-stellar results.
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