Bitcoin Extends the Fall, Now at One-Month Low Below $8K
The year commenced with a massive rally in Bitcoin (BTC) that ultimately led to a sustained bull run, and the price of the world’s biggest cryptocurrency eventually reached levels that raised visions of 2017’s climb. However, that eventually came to an end, and the last few months have been pretty tough for the crypto industry at large.
Why the Sudden Reversal?
In a new development that would come as a bit of a shock for many in the crypto space, BTC has collapsed to below $8,000 levels today. This is the lowest level for the cryptocurrency in a month, and the latest plunge comes after BTC had been on a bit of a downward spiral for around a week.
At the start of the year, it had been thought that 2019 was going to be a particularly good year for Bitcoin, since institutional money and fresh investors were going to flock to the cryptocurrency. With new money flowing in, the price of the token would have increased steadily as well. However, that has not come to pass. According to the head of investment at asset manager Acra, BTC has seen very low volumes, and fresh capital has not come into it at all in recent days. At the same time, other asset classes, like stocks or bonds, have generated highly impressive returns.
There is a consensus among experts that money may be moving on from BTC and crypto to other asset classes. Earlier on in November, the CEO of Luno, Marcus Swanepoel, observed in a note, “The downward pressure is being caused by a divergence of investment strategy across all asset classes, which has created indecision and cautiousness.”
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The past few days have definitely given the impression that a hard selloff has been taking place, as money is being taken out of the marketplace by traders. However, it should be noted that Bitcoin has had bigger drops and has come back stronger than ever.
Featured image: DepositPhotos © EdZbarzhyvetsky