Is Bitcoin sinking? Analysts dismiss market panic as BTC sentiment remains ‘positive’

Bitcoin fraud: Victim discusses ‘warning bells’

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BTC’s new all-time high, which it reached on November 10, clocked in at $68,622.63 (£51,344.48). That record is the highest the token has reached since October 20, when investors could pick it up for $66,878.47 (£50,039.47) apiece. Although yesterday paved the way to an impressive new high, the last 24 hours have seen the crypto drop again to $65,167.01 (£48,758.93).

Is Bitcoin sinking?

Bitcoin’s recent move is a direct response to the US financial situation, particularly the stock exchange.

The decline followed the US consumer price index (CPI) report, which showed inflation rising at its fastest rate since 1990.

The report radiated through US markets and eventually impacted the cryptocurrency market.

Juan Pellicer, an analyst for blockchain company IntoTheBlock, said the S&P 500 and Nasdaq “reacted badly” to the announcement.

He added cryptocurrencies then reacted similarly.

But the drop likely won’t take too much of a toll on Bitcoin, which remains popular.

Nicholas Cawley, an analyst at DailyFX, said Wednesday’s movement would see investors try to “build their positions”.

He said: “Wednesday’s sharp sell-off in the cryptocurrency market was a sharp reminder – to short-term traders at least – that volatile price moves are always around the corner.

“Bitcoin and Ethereum both made fresh all-time highs after the release of the US inflation numbers that showed price pressures at a 30-year high.

“The sharp move lower later in the session has been attributed by some to fears that beleaguered Chinese property giant Evergrande had missed coupon payments on one of its dollar bonds, although there remain conflicting reports over this.

“Traders with a longer-term view on BTC and ETH may well use this recent sell-off to build their positions as sentiment going forward remains positive.”

Any time a cryptocurrency plummets, it provides a potentially lucrative opportunity for new or seasoned buyers.

The reduced price means they can buy new units at a lower price before they rise again.

A practice like this is what insiders call “buying the dip”.

But it doesn’t always end well, as cryptocurrencies remain highly volatile.

While analysts believe Bitcoin will ultimately claw back its price and eventually rise above, it could also collapse.

The last time it dropped following a surge – in October – BTC didn’t regain its position until November 8.

On the other side of the market, some optimistic analysts believe Bitcoin could double or triple in price.

Analyst Matthew Hyland said it could “easily” make $250,000 (£187,053.75) by 2022.

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