Will bitcoin price drop

Why Do We Get Extreme Bitcoin Price Drops?

Bitcoin’s price often drops quickly and seemingly for no reason — what are some possible causes for the top crypto’s flutuations?

Table of Contents

The price of Bitcoin has been on a seemingly unstoppable ascent since November 2020, to reach the promised land (and all-time high) of $20,000 this month. Buoyed by increasing institutional interest after PayPal’s foray in crypto custodianship, tightening supply thanks to the Bitcoin halving mining reduction and the weakening U.S. dollar, Bitcoin’s 2020 bull run, while sharing a similar time frame to its 2017 predecessor, has seemed markedly different and more determined.

Yet, days before it recovered to a new peak in December 2020, shocked investors witnessed a sharp price drop from Nov. 25 to 27. From a drive towards the $19,000 range, it went skidding down to the $16,000-level within hours. In a mere two days, it shed $3,000 in value and revived a sobering case of deja vu in more seasoned crypto investors used to the periodic oscillation between “fear of missing out” (FOMO) and “fear, uncertainty and doubt” (FUD) that separates the weak investor hands from the strong,В

The November crash was attributed to rumored legislation that would target crypto wallets before the end of Trump’s term. However, surely this couldn’t be the sole reason for such a strong reversal, after Bitcoin brushed off the BitMEX prosecutions with barely a hiccup only weeks earlier. With a lion’s share of crypto’s total market cap, BTC shouldn’t be as volatile as other less established cryptocurrencies who frequently experience so-called pump and dumps due to low liquidity.В

This begs the question: how much of Bitcoin price movement can be attributed to legitimate market forces, and is there an invisible dark hand involved? What gives, Bitcoin?

Why Do We Get Extreme Price Drops in Crypto?

It goes without saying that there are many factors affecting the rise and fall of Bitcoin’s price, the first digital currency of its kind, which derives its price from a fixed, deflationary supply and fluctuating and cyclical demand. The reasons touted above were undoubtedly driving factors that led to the rise of the digital asset. But what are the factors that caused the drop?

While there is no clear industry consensus on the reasons, there are plenty of suspects to consider during Bitcoin’s latest (brief) fall from grace.В

Bitcoin Whales

According to CryptoQuant CEO Ki-Young Ju, the reason for the drop can be partly attributed to crypto whales who began to deposit large volumes of their Bitcoin holdings to exchanges in order to cash in on BTC’s record highs. This is similar to what happened with Bitcoin back in the 2017 bull run, when whales contributed to a major shift in the cryptocurrency’s value just by moving their assets to other platforms.

The blockchain analytics firm IntoTheBlock showed that from Nov. 25 to 26, Bitcoin whales unloaded 93,630 BTC in different exchanges. This totaled to over $1.6 billion worth of BTC.

Another report noted that the movement of Bitcoins out of OKEx also played a role in this scenario as well. OKEx users were disgruntled with the platform after withdrawals were forbidden for weeks after Chinese authorities allegedly arrested one of its key holders. This resulted in an outflow of around 29,300 BTC from the platform, which was worth $500 million.

CryptoQuant’s data also shows that even the amount of Tether (USDT) held in OKEx wallets had dropped by 97.6% within just a week. What this reflects is that users began transferring their assets to a different exchange or their own cold wallets.

CryptoQuant CEO Ki Young Jo emphasized that on-chain indicators continue to reflect a strong buying pressure. This means that the bull market is not ready to end anytime soon. However, he also noted that when the whales are active on exchanges, the likelihood of Bitcoin’s price going sideways or down is also high. Here, Jo noted that there is a danger zone for BTC that users have to be wary about whenever they plan to hold new positions.

A ‘Healthy Pullback’

Then again, many believe that the price drop was to be expected, and is in fact a good thing that’s allowing Bitcoin to let out a bit of steam before it ascends dramatic new heights — especially since the its price trend is still similar to the pullbacks before that ranged around 20% in other recorded bull runs in Bitcoin history.

Derivatives Trading

The drop has been accompanied by a massive liquidation of multiple derivative positions, amounting to almost $2 billion. This led to “market overheating,” which is seen from the futures market being overleveraged.В

Basically, this meant that the value of perpetual contracts has become much greater than the value of Bitcoin and its underlying equity. Much of Bitcoin trading is so complex and interwoven with sophisticated trading and institutional products, such as futures, leveraged margin trades (exceeding 100x on some exchanges) and decentralized finance (DeFI) protocols — a sudden slide in Bitcoin’s price can set off a chain reaction of automated responses executed by trading bots within milliseconds, leading to an abrupt oversupply of BTC and a further steep drop in price.В

According to cryptocurrency analyst Joseph Young, when the funding rate fell to 0.011%, it reflected the fact that Bitcoin perpetuals were oversold following the deep price drop of around $3,000. This supports the claim of other analysts that there was, indeed, too much leverage in the market. Young adds, however, that the price of Bitcoin remained resilient at $18,000 despite the overselling.

Regulatory Uncertainty

United States regulators have always had a dysfunctional love-hate relationship with Bitcoin. There are rumors circulating that the U.S. Treasury Department is planning to implement a mechanism where they will become empowered to monitor the crypto-wallets of users. It didn’t help that Brian Armstrong, CEO of Coinbase, publicly tweeted his concern, triggering a flood of sell-offs.В

Investor Caution

Don’t underestimate the impact of the average trader either. There are certainly a large group of battle-hardened Bitcoin investors and HODLers who still carry the scars of 2018’s “Crypto Winter” and who have waited patiently to recoup their losses or have a second chance at redemption — that is, to sell their BTC at record high prices.В

Until Bitcoin crosses the promised land that lies yonder between those two stacks of high society, it’s still anybody’s game, and savvy investors know this. As a result, when the price dips sharply, nerves get frayed and sell buttons get pushed. While many Bitcoin holders may propagate the unstoppable rise of the currency and predict near-future highs totaling hundreds of thousands of dollars, in private they might not be quite so optimistic. As the saying goes, buy the rumor, sell the news.В

When Will the Next Price Drop Come?

Predicting when the bull run for Bitcoin will end is still tricky. With so many external variables in the world at present, such as the rampant pandemic, the U.S. presidential handover and the dangerous potential regulatory fallout, it is nearly impossible to determine the next steps of crypto whales and how the existing positions in the market are going to move. Until clear regulation also stops blatant market manipulation behavior, we’ll have to accept that anything can happen to the price of Bitcoin.В

Before we decide to hold new positions or exit existing ones, it is very important to understand that there are many stakeholders in the market and that they each play a significant role in the movement of BTC prices. Don’t be easily swayed by FOMO or FUD, do your research and act accordingly.В

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.

Источник

Bitcoin Price Prediction | Will Bitcoin Rise Once Again?

Bitcoin is a decentralized financial technology that could replace fiat currencies across the globe. Because it holds such potential, Bitcoin price predictions reach as much as $1M.

Intro

Bitcoin is the first cryptocurrency to ever be created, sparking the birth of an entire industry and thousands upon thousands of altcoins to be created in its image.

Not only is Bitcoin the first of its kind, but it has been designed to disrupt and replace paper-based fiat currencies to become the global digital currency used by the entire population, regardless of what country or region they live in.

Because Bitcoin is so powerful and has so much potential, Bitcoin’s projected value and estimated growth could be astronomical. Speculation from crypto analysts and industry experts suggests that Bitcoin’s long term value could reach over $100,000 to as much as one million dollars per BTC in the future.

But when will Bitcoin reach such prices? This BTC price prediction guide will help investors answer questions like “how high will Bitcoin go” and “what could Bitcoin be worth in 10 years.”

What is Bitcoin and Why is Bitcoin Going Up?

Bitcoin was created by the mysterious Satoshi Nakamoto to be the first peer-to-peer electronic cash system. Because Bitcoin is peer-to-peer, it is considered decentralized and doesn’t require a controlling third party – such as a bank or government – to confirm or monitor transactions.

Instead, Bitcoin transactions are confirmed by miners who are rewarded with BTC for each block that is verified and added to the blockchain. This reward is what incentivizes miners to continue to confirm transactions and keep the Bitcoin network growing.

Every four years, Bitcoin’s block reward is reduced in half, resulting in miners receiving less and less BTC as time goes on. This is referred to by the crypto industry as a halving.

Bitcoin’s supply is hard-capped at 21 million BTC and combined with each block halving, gives Bitcoin a deflationary aspect and provides the asset with a scarcity similar to gold. In fact, Bitcoin has been commonly referred to as digital gold.

These unique properties are said to make Bitcoin not only a borderless transactional currency, but also a store of value, and even a safe haven asset during times of economic crisis.

Bitcoin was designed by Satoshi Nakamoto in the wake of the 2008 economic crisis, as a way to put power and control back into the hands of users and out of the reach from banks and governments that have long controlled the flow of money.

Together, all of these aspects make Bitcoin an incredible financial technology with the potential to change the world. And as a result, Bitcoin projected growth is expected to be substantial and reflect its true value as a global currency.

The History of Bitcoin Price Action

Bitcoin price today is trading at around $38,000, but given how volatile the asset is and its propensity to go on parabolic runs, Bitcoin price tomorrow could double from here or correct by 80%.

Bitcoin started off its life virtually worthless, with a value of far less than a penny when the Bitcoin Core client code was released into the wild. Years later, it began trading at over $1,000 and started to be considered as a serious financial asset with long term potential.

In 2017, Bitcoin potential took the world by storm, as many became rich beyond their wildest dreams once Bitcoin reached its now former all-time high of $20,000 per BTC coin. Mainstream media ran BTC news story after story, causing retail investors to rush into buying the asset.

But once 2018 hit, a major Bitcoin trend change occurred, and the price started going down. Due to how volatile Bitcoin is, market price retraced as much as 80% down to $3,000 where it eventually bottomed, leaving many wondering “will Bitcoin go up in value ever again?” Others knew Bitcoin will rise again, and opened long positions at the bear market bottom.

At the start of 2019, Bitcoin growth returned once again, and a powerful rally took Bitcoin price back out of the bear market lows, and above $10,000 to $14,000 before falling back down to $6,500.

In 2020, the Black Thursday crash took Bitcoin to under $4,000. But the stimulus efforts put forward by the US and other nations to combat the pandemic, inflated the money supply significantly putting Bitcoin in the financial spotlight.

The cryptocurrency went into another uptrend in 2021 and set a new all-time high at $65,000. With no real resistance above the cryptocurrency is back in price discovery mode and sky is the limit.

Experts Share Their Thoughts on Bitcoin Future

Several experts have weighed in on their short and long-term price expectations for Bitcoin price. Here are some of the most popular Bitcoin price forecasts from top crypto industry experts.

Max Keiser, Financial Analyst and Host of The Keiser Report

Max Keiser, investor, and host of the Keiser Report calls for $100,000 Bitcoin in the short term, but $400,000 in the long-term.

Keiser is one of Bitcoin’s most outspoken bull, calling for $100,000 since the asset was trading at just $1. His new $100,000 target though is for the end of 2020, meanwhile, $400,000 is a long-term goal due to the coronavirus and a comparison to gold.

“I am officially raising my target for Bitcoin — and I first made this prediction when it was $1, I said this could go to $100,000 — I’m raising my official target for the first time in eight years, I’m raising it to $400,000,” Keiser said.

Robert Kiyosaki, Entrepreneur, Investors, and Best-Selling Author

Robert Kiyosaki, New York Times bestselling author of the book Rich Dad, Poor Dad has been recommending his followers buy gold and Bitcoin. He calls for gold to reach $3,000 an ounce, and Bitcoin to reach $75,000.

Plan B’s Stock-to-Flow Model Based on Scarcity

The popular Stock-to-Flow model created by Bitcoin expert Plan B which uses the asset’s digital scarcity to estimate price valuations in the future. The model shows Bitcoin reaching as high as $288,000 in the next cycle peak, which should take place over the next couple of years.

Adam Back, Bitcoin Developer and CEO at Blockstream

Bitcoin developer and early electronic cash pioneer Adam Back says that Bitcoin should reach as high as $300,000 over the next several years.

“[Bitcoin] might not require additional institutional adoption [to reach $300,000] because the current environment is causing more individuals to think about hedging [and] retaining value when there’s a lot of money printing in the world,” Back told Bloomberg.

Retrospective: Past Bitcoin Historical Price Predictions That Got It Right

BTC price forecasts aren’t easy to make, but several of leading industry experts have managed to make correct calls over the years.

Daniel Masters, Analyst at Global Advisors

Daniel Masters made a call for Bitcoin price to break out in 2017 and reach a high of $4,400. Bitcoin did indeed reach that price in 2017, but smashed right through it and kept on going to $20,000.

Vinny Lingham, South African Internet Entrepreneur and CEO of Civic

Back in 2016, Vinny Lingham made a bold call that Bitcoin would reach between $2,000 and $3,000 in 2017, a more conservative call than Masters. Just like Masters, the call was trounced by Bitcoin’s explosive rally.

Peter Brandt, Legendary Commodities Trader

In one of the rare negative price predictions that came true, Peter Brandt called for Bitcoin to drop over 80% following a break of its parabolic advanced in early 2018. By the end of the year, that target was met and Bitcoin fell to $3,200.

Tim Draper, Billionaire Venture Capitalist

Tim Draper has a knack for spotting the next big thing, and he’s heavily invested in crypto. The billionaire venture capitalist called for Bitcoin to reach $10,000 by 2018 all the way back in 2014. The visionary was right once again, and the year prior the asset doubled that projection.

Bloomberg Research 2020 Bitcoin Report

Bloomberg Research recently released a new report on the future of Bitcoin as an investment. The major media hub and finance terminal says that Bitcoin should reach $12,000 and $20,000 by the end of 2020. Both predictions were accurate.

Technical Analysis-Based Bitcoin Forecast

Based on the predictions of industry experts and big-name investors, it’s easy to see that Bitcoin growth could be enormous considering current prices near $35,000. However, how and when Bitcoin price will reach such lofty predictions is unclear. Crypto analysts often perform technical analysis in order to predict price movements and when they may occur. We’ve gathered some of the best technical analysis from the industry’s best analysts in order to further help understand how high Bitcoin can go.

Bitcoin Price Prediction 2021

As bullish as everyone is on Bitcoin, the cryptocurrency is likely to be entering a short-term bear phase much like it did mid-way through 2019. Bitcoin price couldn’t touch all the way to the top of the log growth channel, suggesting that after another pullback, new highs are still ahead before the bull market is over. The MACD also flipped bearish and the RSI set Bitcoin back at resistance. A bearish divergence could form at another push higher. The top of the channel is around $325,000 per BTC.

Bitcoin Price Prediction 2022 – 2023

Once the parabolic curve fully breaks down, the leading cryptocurrency by market cap will plunge into another bear market. But not before Bitcoin reaches prices of hundreds of thousands per coin. The fall could take Bitcoin back to the current level, around the mid-$30K region.

Bitcoin Price Prediction 2024 – 2025

Bitcoin bulls will put in another bottom, buying at the current level as the bull market final “dip” into a bear market. A new parabolic curve will form, and Bitcoin will head off toward millions.

Conclusion: BTC Price Forecast and Long-Term Price Predictions

Considering all of the massive price projections and forecasts from industry experts that suggest Bitcoin will someday replace all currencies across the globe, it’s easy to see what so many are bullish on Bitcoin, and why Bitcoin price predictions can reach such high numbers, ranging from thousands to even over $1 million dollars per BTC.

The revolutionary technology has sparked an entire industry aimed at disrupting traditional finance, and cryptocurrencies are already well on their way to widespread adoption and regular use by the mainstream public.

Bitcoin is accepted most places these days, and can even be purchased at grocery stores through Coinstar machines. Bitcoin has already come such a far way and even became a media sensation in 2017 thanks to stories of early investors in the crypto asset becoming rich.

However, given the price predictions in this article, it’s never too late to invest in or trade Bitcoin and take advantage of its volatility.

The below prediction chart outlines some of the minimum and maximum BTC price forecasts offered by technical analysts and industry experts in an easy to digest format.

Year	High	Low
2021	$325,000	$17,000
2022	$275,000	$42,000
2023	$145,000	$63,000
2024-2025+	$1,000,000	$275,000

Give the lows and highs in recent years, as well as the lows and highs predicted by industry analysts and experts, it’s easy to see how opening a short or long position using 100x leverage to trade Bitcoin’s volatile price swings can be extremely profitable, and even more profitable than investing itself.

Traders can take advantage of such tools provided by trading platforms like PrimeXBT, and open positions with up to 100x leverage on the BTC/USD pair. BTC is also paired with other altcoins such as Ethereum, Litecoin, Ripple, and EOS. PrimeXBT also offers traditional assets such as the most popular forex currencies, commodities, stock indices, and spot contracts for gold and silver.

With Bitcoin about to take off on yet another bull run, the opportunity to profit has never been greater. And with Bitcoin price expected to reach $100,000 to as much as $1 million per BTC, it’s never too late to get started trading Bitcoin.

The information provided does not constitute, in any way, a solicitation or inducement to buy or sell cryptocurrencies, derivatives, foreign exchange products, CFDs, securities and similar products. Comments and analysis reflect the views of different external and internal analysts at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of PrimeXBT. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible. It is specified that the past performance of a financial product does not prejudge in any way their future performance. The foreign exchange market and derivatives such as CFDs (Contracts for Difference), Non-Deliverable Bitcoin Settled Products and Short-Term Bitcoin Settled Contracts involve a high degree of risk. They require a good level of financial knowledge and experience. PrimeXBT recommends the consultation of a financial professional who would have a perfect knowledge of the financial and patrimonial situation of the recipient of this message and would be able to verify that the financial products mentioned are adapted to the said situation and the financial objectives pursued.

Other news

A recent selloff across the cryptocurrency market has turned greed to fear, and in a flash nearly a trillion in…

After suffering a rather large collapse last week, the Bitcoin market is struggling to bounce back in characteristic fashion. The…

It has been quite clear that the cryptocurrency market, through most of 2021, had been riding on a massive positive…

PrimeXBT products are complex instruments and come with a high risk of losing money rapidly due to leverage. These products are not suitable for all investors. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Seek independent advice if necessary.

This website products and services are provided by PrimeXBT Trading Services LLC

PrimeXBT Trading Services LLC is incorporated in St. Vincent and the Grenadines as an operating subsidiary within the PrimeXBT group of companies. PrimeXBT Trading Services LLC is not required to hold any financial services license or authorization in St. Vincent and the Grenadines to offer its products and services.

PRIMEXBT DOES NOT ACCEPT ANY USERS OR RESIDENTS FROM UNITED STATES OF AMERICA, JAPAN, SAINT VINCENT AND THE GRENADINES, CANADA, ALGERIA, ECUADOR, IRAN, SYRIA, NORTH KOREA OR SUDAN, UNITED STATES MINOR OUTLYING ISLANDS, AMERICAN SAMOA, RUSSIAN FEDERATION AND THE COUNTRIES OR TERRITORIES WHERE ITS ACTIVITY SHALL BE ESPECIALLY LICENSED, ACCREDITED OR REGULATED BY OTHER WAYS. YOU SHALL CHECK YOUR APPLICABLE LAW AND BE FULLY RESPONSIBLE FOR ANY NEGATIVE IMPACT ARISEN FROM YOUR RESIDENCE COUNTRY REGULATIONS. IF YOU ARE TRAVELLING TO ANY OF THESE COUNTRIES, YOU ACKNOWLEDGE THAT OUR SERVICES MAY BE UNAVAILABLE AND/OR BLOCKED IN SUCH COUNTRIES.

PRIOR TO TRADING WITH MARGIN YOU SHOULD CAREFULLY CONSIDER THE TERMS AND CONDITIONS OF THIS WEB-SITE, TO THE EXTENT NECESSARY, CONSULT AN APPROPRIATE LAWYER, ACCOUNTANT, OR TAX PROFESSIONAL. IF ANY OF THE FOLLOWING TERMS ARE UNACCEPTABLE TO YOU, YOU SHOULD NOT USE THE WEB-SITE, AND TO THE EXTENT PERMITTED BY LAW, YOU AGREE NOT TO HOLD ANY OF THE COMPANY AND ITS RESPECTIVE PAST, PRESENT AND FUTURE EMPLOYEES, OFFICERS, DIRECTORS, CONTRACTORS, CONSULTANTS, EQUITY HOLDERS, SUPPLIERS, VENDORS, SERVICE PROVIDERS, PARENT COMPANIES, SUBSIDIARIES, AFFILIATES, AGENTS, REPRESENTATIVES, PREDECESSORS, SUCCESSORS AND ASSIGNS LIABLE FOR ANY LOSSES OR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM, OR IN ANY WAY CONNECTED, TO THE TRADING WITH MARGIN, INCLUDING LOSSES ASSOCIATED WITH THE TRADING WITH MARGIN.

PLEASE NOTE THAT COMPANY IS IN THE PROCESS OF UNDERTAKING A LEGAL AND REGULATORY ANALYSIS OF BITCOIN TRADING WITH MARGIN. FOLLOWING THE CONCLUSION OF THIS ANALYSIS, COMPANY MAY DECIDE TO AMEND THE INTENDED FUNCTIONALITY IN ORDER TO ENSURE COMPLIANCE WITH ANY LEGAL OR REGULATORY REQUIREMENTS TO WHICH COMPANY IS SUBJECT. WE SHALL PUBLISH A NOTICE ON OUR WEBSITE OF ANY CHANGES THAT WE DECIDE TO MAKE MODIFICATIONS TO THE FUNCTIONALITY AND IT IS YOUR RESPONSIBILITY TO REGULARLY CHECK OUR WEBSITE FOR ANY SUCH NOTICES. ON THE CONCLUSION OF THIS ANALYSIS, WE WILL DECIDE WHETHER OR NOT TO CHANGE THE FUNCTIONALITY OF THE WEB-SITE.

The company does accept only participants:

1. he/she/it is of an age of majority (at least 18 years of age), meets all other eligibility criteria and residency requirements, and is fully able and legally competent to use the Website, enter into agreement with the PrimeXBT and in doing so will not violate any other agreement to which he/she/it is a party;
2. he/she/it has necessary and relevant experience and knowledge to deal with margin trading, cryptocurrencies and Blockchain-based systems, as well as full understanding of their framework, and is aware of all the merits, risks and any restrictions associated with margin trading, cryptocurrencies and Blockchain-based systems, as well as knows how to manage them, and is solely responsible for any evaluations based on such knowledge;
3. Is not a foreign or domestic PEP.
4. he/she/it will not be using the Website for any illegal activity, including but not limited to money laundering and the financing of terrorism;

Keep in mind that trading with margin may be subject to taxation. You are solely responsible for withholding, collecting, reporting, paying, settling and/or remitting any and all taxes to the appropriate tax authorities in such jurisdiction(s) in which You may be liable to pay tax. PrimeXBT shall not be responsible for withholding, collecting, reporting, paying, settling and/or remitting any taxes (including, but not limited to, any income, capital gains, sales, value added or similar tax) which may arise from Your participation in the trading with margin.

Content, research, tools, and coin symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular asset or to engage in any particular investment strategy. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results, do not take into consideration commissions, margin interest and other costs, and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested. You alone are responsible for evaluating the merits and risks associated with the use of our systems, services or products.

Источник