Over the weekend, Bitcoin continued its downwards tailspin due to weak buying volume, and many of the cryptocurrency market’s losses have stretched into Monday. The persisting market decline is now leading traders and investors alike to question how low the markets will go before they hit a bottom.
At the time of writing, Bitcoin is trading up 1% at its current price of $3,800. Over this past weekend, Bitcoin set a new yearly low at approximately $3,500, from which it temporarily recovered to highs of just over $4,100 earlier today before continuing to drop to its current price. Bitcoin has bounced slightly from its daily lows of $3,640, but it is unclear how short-lived this move will prove to be.
Bitcoin may not have fallen far enough for it to establish a long-term bottom, and further losses may be necessary in order for macro-reverse to be in play.
Last week, Michael Moro, the trading chief at Genesis Trading, told CNBC’s Squawk on the Street that Bitcoin needs to hit the $3,000 level before bottoming and reversing the downwards trend.
“You really won’t find [the floor] until you kind of hit the 3K-flat level. It’s really difficult. There are small levels of resistance. We’ve seen the 4,000 level get tested twice now in the last couple of days, but I really don’t think there’s too much in the mid-3s,” he explained.
This being said, there could be further losses that are necessary before the markets begin a new upwards cycle that could propel the markets to new highs, and the entire world seems to be questioning what the true value of Bitcoin really is.
“There is nothing normal nor positive about this type of price movement so beware of false profits selling soothsayer storylines and never get anchored to a price. Just because BTC is trading below $5,000, $4,000 or $3,000 for that matter, doesn’t mean bitcoin is undervalued even more so when BTC offers up no intrinsic store of value,” said Stephen Innes, the head of Asia Pacific trading at Oanda, while speaking to MarketWatch.
Altcoins Dragged Down by Bitcoin
This weekend also proved to be turbulent for the altcoin markets, as Bitcoin’s unprecedented drop to new lows sent many altcoins spiraling downwards, with XRP falling to the low-$0.30 region, and Bitcoin Cash setting new all-time-lows.
At the time of writing, XRP is trading up nearly 3% over a 24-hour trading period at its current price of $0.352. Over the weekend, XRP followed Bitcoin’s lead and plunged below the $0.40 region to lows of $0.32 before bouncing back to highs of $0.39. Since experiencing a temporary bounce back towards the $0.40 region, XRP has continued to decline to its current price levels.
Bitcoin Cash, which set a new all-time-low over the weekend, is currently trading up 5% at its current price of $178 but hasn’t rallied much since setting a fresh low of $155 on Sunday.
Ethereum has also had a bad week and flirted with double digits on Sunday. Despite this, its price seemed to find support around the $100 level and has since recovered slightly to its current price of $108.
As the markets continue their downwards descent, investors are becoming increasingly interested as to what price will prove to be a reversal point for the cryptocurrency markets.
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