Bitcoin has come to a bit of a halt as of late. The currency, which had recently pushed beyond the $8,000 mark, is now trading for just over $7,100. This marks a near-$1,000 fall over the last 24 hours, though the good news is that bitcoin had previously fallen to about $6,400, and the range where it’s at now is a definite improvement.
Why Is Bitcoin Falling?
It seems like no matter how well bitcoin does, it still manages to make investors nervous. Nobody can relax, and the idea that price swings can occur at any time rings through their brains.
The other unfortunate thing is that bitcoin’s behavior tends to take a serious toll on other forms of crypto. Ethereum, for example, also fell by over seven percent within the last 24 hours, while Ripple’s XRP dropped by more than 15 percent.
Jehan Chu – co-founder of Kenetic Capital – states his thoughts on the bearish turn crypto has taken:
This last drop was likely caused by a combination of profit-taking and algorithmic trading compounding the swift fall. We can expect these types of steep rises and drops to continue for some time until institutional investors grow market volume.
Ah, the age-old argument behind institutional investors. No doubt they’ve gotten involved in crypto over the last two years, but maybe they just haven’t gotten involved fast enough. With the introduction of cryptocurrency trading amongst investing platforms like Fidelity and E-Trade, we can likely expect more institutional activity in the coming months, but for now, their lagging presence is taking a toll on prices.
Chu further commented that:
The key takeaway from the past few weeks is that with each of these surges, the overall interest and investment continues to expand around a growing core of real blockchain use and adoption.
For the most part, bitcoin has been struggling for nearly a year-and-a-half to move back up towards its all-time high of roughly $20,000 in December 2017. While the currency has managed to incur a few spikes since the beginning of April, there’s still plenty of room for improvement. At press time, there’s still a near-$13,000 window remaining if bitcoin is to get back to its former glory days.
2018 was marred by so many serious drops that it’s likely to take bitcoin some time to return to its December 2017 status, and doing that without manipulation behind it could be even more difficult.
Did Someone Sell Too Much?
One of the potential reasons for the sudden drop may have been a near-$7,000 bitcoin sell order on Bitstamp. Su Zhu – CEO at Three Arrows Capital – explains:
BitMEX wicked down to $6,400. 2,000 BTC+ sell wall on Bitstamp absorbed. Looks like a mark price exploit by placing a large sell stamp (one of two oracles for mark on BitMEX) to trigger liquidations on BitMEX.