Bitcoin price remained down for its third day. However, it looks like there is some solid support around the $10,000 mark. The price has dipped below it thrice this month and bounced off of it. The question is, can Bitcoin get back to an upward trend?
Bitcoin Price All-Time High
Just a little over a month ago, cryptocurrency investors were celebrating that all-time high price of $19,900. The run up started when Bitcoin price crossed the $6,000 mark for the first time on October 20th. Then it dipped back down to $5,376 on the 25th before bouncing up to $7,344 on November 8th. That gain didn’t stick and there was one more decline back down to $5,511.
However, that was the last time Bitcoin price would see that number as on November 13th, the big run up began and it reached $6,811. By November 19th it was trading solidly above $8,000 and nine days later is reached $10,000 for the first time.
Then Bitcoin price accelerated its increases and was at $14,000 on December 6th, eight days later. The next day Bitcoin price saw its largest single day price jump with a low of $13,500 that day and a high over $16,000 on the day. The next few days saw a minor sell off dropping it back into the $14,000 range but it continued its run up through December 17th when it reached $19,891.
The Sell Off
At that point a big sell off began. This caused five straight days of losses with prices dropping down to $10,700 on December 22nd. The price oscillated for a while until, again, bouncing from a low of $11,651 on the 30th, to the next high of $17,252 on January 6th.
Bad News Abounds
Much of the losses in the crypto markets are due to a seemingly never-ending line of bad news for crypto markets. South Korea stated they were going to totally ban cryptocurrency trading. China announced it was going to crack down on mining, and exchanges. A crypto exchange in Japanese apparently had $532M stolen by hackers. All of this continued to drive the price down and caused the first $10,000 support test. That resulted in the so called Bloody Tuesday where Bitcoin price went from a high of $13,617 down to $9,940.
The next couple days did not see much in the way of price movement. The price reached a low of $9,231 on the 17th. Slowly, it started to climb out of that price pit and by the 20th it had reached back up to highs in the $13,000 range. But those gains would be short lived as it would continue to trade in the $10,000 to $12,000 range for several days.
Up to Date
The price fell again below $10,000 yesterday with a low of $9,760 and a high of just $10,414. At present the price is just above $10,000 and the volume weighted average price (VWAP) has bounced off the $10,000 line. Currently VWAP is slightly higher than the trades taking place by about $90. Not a large difference. Will it make a recover and bounce off the $10,000 mark again or will it continue downward?
$10K vs $8K vs $6K
There are a couple prevailing schools on Bitcoin price right now. Some say that $10,000 is the support point and it will not dip below that number for any long period of time. There is another group that believes that same thing, but at $8,000. There are some others who suggest that $6,000 might be the real bottom.
Then there are the deniers. Those that think that Bitcoin is a bubble, that cryptocurrencies will totally collapse. They feel that because there is no fiat currency tied to it, there is no value in it whatsoever and that everyone who has money invested is going to lose it all.
However, watching the market today, one can see there is a lot of buying going on across the $10,000 point. Will it dip below that point? Maybe. Will it stay down there? Probably not. Institutional money has already begun to enter into the market. There are already two Bitcoin Futures, at CME and CBOE.
Finally, high volatility in the Bitcoin price is simply a piece of the puzzle that needs to be overcome. In order to reach a price stabilization area the blockchain technology has to continue to mature and this is a step in that process.
As always, we’re offering information, not financial or investment advice. If you are thinking of investing, or pulling out of Bitcoin and cryptocurrencies, do your research. Know what you are investing in, have a basic understanding of the technology underlying it. Understand how the markets work and what you are getting into. Perhaps even seek out and consult with an actual financial adviser that is cryptocurrency savvy.