Bitcoin’s Volatile Week Lowers Confidence in Crypto Resurgence

  • “Being Bitcoin, a 10% range intraday is a mere flesh wound to the digital asset, in a world where tradable versus investible is seriously blurred," said Jeffrey Halley,
  • The digital coin could “easily be $35,000 again tomorrow or could drop through $30,000 and test notional support at $27,000."
  • “Over the past few days, Bitcoin has been trading approximately 30% lower than the most recent all-time highs, and we've seen Asia take profits in Bitcoin in the lead-up to Chinese New Year,” said Fernando Martinez, head of Americas with crypto brokerage OSL

Bitcoin’s January 8 record of nearly $ 42,000 embodied risk acceptance in stimulus-flooded financial markets. This week’s strong bitcoin sell-off is raising new questions about the sustainability of the cryptocurrency boom. Digital asset prices have fallen 14% this week, marking the highest drop since March.

Bitcoin Price Drops More Than 11% on Claims of Double Spend Vulnerability.

Bitcoin was stable at around $ 31,000 on Friday and going by analyst’s warnings, a continued drop for instance to below $ 30,000 could herald further losses.

“Being Bitcoin, a 10% range intraday is a mere flesh wound to the digital asset, in a world where tradable versus investible is seriously blurred,” said Jeffrey Halley, Senior Market Analyst at Oanda Asia Pacific Pte. The digital coin could “easily be $35,000 again tomorrow or could drop through $30,000 and test notional support at $27,000.”

Bitcoin’s January 8 record of nearly $ 42,000 encompassed risk acceptance in stimulus-flooded financial markets. Others opine that bitcoin is also becoming a more mainstream investment and that it has a role to play in hedging risks, such as a weak dollar and faster inflation.

Others see the rise as nothing more than a speculative mania, as the digital currency increased in it’s value three times last year.

Identifying who is primarily responsible for the rally in bitcoin is subject to various mysteries: bitcoin funds, momentum seekers, billionaires, day traders, companies, and even institutional investors.

For example, Grayscale Investments, which is behind a popular bitcoin trust, saw capital inflows of more than $ 3 billion into its products in the fourth quarter. This week, BlackRock Inc. entered the crypto universe for the first time, saying that cash-settled bitcoin futures are among the assets that two funds can buy.

Janet Yellen’s recent comments could be among the reasons for bitcoin’s crash, said Jehan Chu, a managing partner at Hong Kong-based blockchain advisory firm Kenetic Capital. At her Senate confirmation hearing, Yellen noted that cryptocurrencies were an area of ​​concern regarding terrorist financing and criminal actions.

Bitcoin’s Volatile Week Rattles Faith in Crypto Resurgence.

Terming such fears as “unfounded,” Chu reiterated that there is a “natural correction” underway and that the gain will not “reverse the unprecedented assimilation of bitcoin into Wall Street’s DNA, bringing it to $ 100,000 levels this year”.

Some strategists are more skeptical. For instance, UBS Global Wealth Management recently warned that there is nothing to stop the destruction of big-name digital currencies amid regulatory threats and competitors issued by central banks.

 “Over the past few daysBitcoin has been trading approximately 30% lower than the most recent alltime highs, and we’ve seen Asia take profits in Bitcoin in the lead-up to Chinese New Year,” said Fernando Martinez, head of Americas with crypto brokerage OSL. The next key level is $27,750 — if Bitcoin falls through that it could retest $25,800, he explained.

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Vincent Ferdinand

News reporting is my thing. My view of what is happening in our world is colored by my love of history and how the past influences events taking place in the present time.  I like reading politics and writing articles. It was said by Geoffrey C. Ward, "Journalism is merely history's first draft." Everyone who writes about what is happening today is indeed, writing a small part of our history.

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