Plummeting Bitcoin Prices After Multiple Headwinds in The Market

The most prominent cryptocurrency of the world- Bitcoin dropped in value by 5% in the last 24 hours after struggling with various challenges. It is alarming to note that the price fell to as low as $7,917.28 which implies a fall of 4.75% from the same time the day before. Since the 8th of October, this digital currency was being traded at its lowest possible point. Though it recovered by few points a while later, yet investing in cryptocurrency is highly unregulated and speculative. Any trader who is trying to trade this digital currency should be prepared for the worst.

Widespread selling activity

The chief investment officer of Arca asset manager Jeff Dorman spoke about the broad-based selling activity while he went on to explain the recent decline in the price of bitcoin. He also stated that this low move was less related to the magnitude but was more about the direction and correlation. Broad-based selling was mainly driven by market makers who are short pushing the market and not by selling or long unwinds. As the volumes are still pretty low, shorts are being incentivized in order to push prices even lower.

Potential reasons behind the clash of bitcoin prices

There are several traders that predict a decisive move that could occur sooner or later based on the bouncing rates of bitcoin. The digital assets constant failure to remain above $8200 to $8400 implies a waning momentum. Lets explore few reasons behind this plunge.

1: Support drew post the 9th try

Since the 24th of September, the price of bitcoin dropped from $9500 and has reached below $7800 on 8 different situations and this price fall is said to be the ninth one. Hence, if you take a technical analysis , youll find that Bitcoin was biased toward a bearish trend on the short time-frame and this steadily increased even within the longer time frames. Reports from TradingView even showed that the dramatic price fall at Btistamp just before cascading considerable price drops which took place at the other exchanges.

2: Mr. Zuckerberg goes to discuss Bitcoin

Just as other traditional markets, the cryptocurrency sector is heavily influenced by the social media and hence the recent news may have played the role of a catalyst in pulling down the price of Bitcoin. Mark Zuckerberg, the CEO of Facebook has testified before the American lawmakers about the popularity of fake news, political ads on the platform. It seems that each time the US Congress discusses on cryptocurrencies, there is a drop in the price of Bitcoin.

3: Quantum breakthrough of Google

Another news that could impact the price of Bitcoin is the announcement from Google about the quantum computer breakthrough that has allowed one of the machines to perform tasks that could take a supercomputer 10,000 years to perform. The quantum computers could solve the most complicated algorithms and hence the Bitcoin investors seem to feel scared about the threat that this is posing. A lot is happening within a short span of time and all this is having an impact on the price of Bitcoin.

A significant drop in market sentiment

Post a run-up in thelong-term sentiment on Bitcoin , there has been a noteworthy drop in the long term market sentiment towards Bitcoin. Experts emphasized that long term sentiment has gone through its steepest decline. Cryptocurrency, the worlds largest digital currency has gone through a reduction in volume of tweets. A month long average tweet volume fell by 38% which was a steeper decline than the price.