Bitcoin’s Price Fell Again For over a month straight we have been hovering around the same price range for bitcoin. Sticking around the $9,200-$9,800 range for the most part. Seemingly unable to overcome the big barrier that is $10,000. What has been keeping us from overcoming this? Is it market fear from the ongoing world situation? Perhaps whale manipulation/buying and dumping. Or maybe even because of exchange mishaps from the likes of Bitmex and Coinbase. Over the counter purchases from large companies like Grayscale. We may never know the answers to this question.
But the price did just dump to under $9,000. Why did this happen? Maybe it was because I finally decided to make a large purchase and buy more. (You’re welcome for the price dip) Although within the last few hours the price is beginning to recover.
But let’s dig into this more.
This first option could very well be the reason I believe. Recently the bitcoin price has been correlated to the movement in price to the US stock market. I don’t like to admit it, but if you look at these pictures, it is pretty obvious.
I still believe the world's situation is having a lot to do with this. There is a lot of fear out there, and people don't know whether they should be buying or selling. A large percentage of people have been affected by the virus. Either directly or indirectly, sickness, loss of income or job, or just trying to sell off some assets to have "just in case" money should things become even worse. Unfortunately it could become worse, especially if when people are set to return to their jobs, and those jobs are no longer there. Like it or not, this is having an effect on the price.
We have had many stories about companies such as Grayscale buying up a large portion of bitcoin recently, but why hasn't this had an effect on the price? Well there are some reasons for this. First of all, these companies that are making large purchases don't want to cause a price surge, because that would cost them more money for their next purchase. The solution is to buy over-the-counter with either exchanges or straight from bitcon miners. While in the short-term this will not effect the prices of bitcoin, if it continues to take place it definitely will have an effect of the available bitcoin to purchase. At the point the price of the coin will surge to new heights.
Not only that but there is also the possibility that so many other people are selling their coins that these large purchases are barely keeping the price of bitcoin stable. If they would for some reason stop purchasing, the price could suddenly dip.
The Halving Effect hasn't Begun Yet
We all know the bitcoin halving will eventually have a big effect on the price. The question in my mind isn't if, but when? And once it does, we will soar to new heights. But the problem is that the bitcoin halving has never had an immediate or even quick effect on the price. It is always the long game, and takes its time to do so. Sometimes 1-2 years. Which puts us right on pace of some price analysts price predictions. Here is PlanB's famous bitcoin price prediction.
Like it or not, but recently every time we have made a significant move up in price, or even down in price; more times than not it has been because of an exchange. Most notably Bitmex and Coinbase. Be it trading liquidations, their systems going offline when there has been a large surge or dump in price. All of this has either caused the price of bitcoin to either drop drastically or halt the current pumps. If we ever hope to reach the next bull market these situations need to be addressed and quickly.
These have only been a few of the possible reasons for why the price continues to hover in the same range recently, but there are possibly several other reasons as well. What do you think is keeping the price the same, or even going down?
As always, thanks for reading!