Why bitcoin rose and fell this week
The bitcoin price has been dropping for the last three days, for which many were preparing in advance. However, the fall in the cryptocurrency rate from its December 8 high of $ 18,353 to today’s low of $ 13,112 has made market participants question the future of cryptocurrency. Some of them argue that a 28% drop in such a short time could be a sign that the bubble is about to burst..
By the time this article was published, bitcoin had won back some of its positions and is trading at $ 15,500. Of course, this does not guarantee anything, but another wave of sales may be on the way, which will bring the rate even lower.
According to one theory, the market is manipulated by whales or cryptocurrency holders, whose accounts contain about 40% of the bitcoins in circulation. This 40% can include from a thousand to several hundred investors. A recent study published by Bloomberg found that 100 bitcoin addresses contain 17.3% of all bitcoins. Definitely, this state is enough to influence market behavior..
In addition, the news of the launch of futures on the CME and CBOE exchanges not only had a positive impact on the cryptocurrency rate, but could also cause its subsequent fall. Traders are likely to be overly enthusiastic about trading this week, which we are seeing over the weekend. The excitement fades away, and with it the course also falls.
There is one more problem: the process of trading bitcoin futures does not require the presence of bitcoins themselves. Thus, the stability that some experts expect to see along with Bitcoin’s entry into traditional markets may be just a utopian idea..
Oanda senior analyst Craig Earlam commented on the market behavior of the largest cryptocurrency after its price peaked and quickly fell by several thousand dollars: “I don’t know if traders will be afraid of what happened this morning. In any case, the movement of the bitcoin rate is extremely difficult to predict; they defy logical explanation “.
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