As the Blockchain industry grows, more traders and investors around the world are getting interested in investing in crypto assets such as Bitcoin and Ethereum.
However, investors in cryptocurrencies’ markets have been having a rough time since the Bitcoin prices started dropping late last year. Towards, the end of last year, Bitcoin prices rallied all the way to the USD 20,000 area and then nosedived to the USD 7000 within a month.
Since then, Bitcoin prices have struggled, with little success, to go above the USD 11,000 area, and the selling pressure seems to be growing stronger by the day.
Negative News Putting Downward Pressure on Cryptos
From mid last month, Bitcoin prices started going up after failing to hit a lower low, and therefore, technical traders have been hoping that the uptrend would soon resume.
Unfortunately, investors long on Bitcoin were, on Wednesday, shocked when Bitcoin prices sharply dropped by over USD 300 in a matter of minutes. The reason for the crash is not straightforward, and market players can only guess.
Some commentators have attributed this drop to the bad news that the Blockchain industry has been attracting.
Goldman Pessimism could be Behind the Crash
For instance, Bloomberg reported that Goldman Sachs had moved the trading of cryptocurrencies down in their priority list. This is despite the optimism they showed earlier in the year when they became the first Wall Street firm to clear Bitcoin futures.
Other major financial markets players have also abandoned the Blockchain industry in the recent past. The negative news could have triggered the panic selling that was characterized by the rapid drop in prices. It is not clear how long the decline will go on or how far it will go.
However, the cryptocurrency seems to be on a rising wedge, and a more clear answer as to where the prices are headed will only be found once the prices break out of the wedge, technically speaking.
Other Cryptos also Affected
The Bitcoin price crash was followed by even more significant price drops in other cryptocurrency markets. Bitcoin fell by 6 percent while Ethereum dropped by 12 percent. Ripple also lost over a tenth of its value amid the market turmoil.
This drop has made it clear that although the Bitcoin prices have been going up steadily for the last couple of week, investors and traders should not get carried away.
Although the prices of Bitcoin is still higher than it was at this point of the year last year, it is still way below the highs of USD 20,000 reached towards the end of last year, and there is still no adequate evidence to signal a resurgence.
The Takeaway
In a nutshell, it is apparent that although the corrective move that Bitcoin has been going through since December last year seems to be over, the uptrend is having difficulties resuming due to the negative news that the Blockchain industry has been suffering.
The Wednesday Bitcoin price crash following the pessimism expressed by Goldman Sachs is an excellent example of how vulnerable the Bitcoin market is, and why it is necessary for investors to proceed with extra caution.
