Short-term traders betting on the bouyancy of Bitcoin who haven’t looked at their browser since yesterday might be forgiven for crying a little into their sleeves.
Bitcoin’s crazy dive today totaling over 15% in losses is a big deal, especially set against the long-term stability that held Bitcoin very steady and calm through the fall.
It’s bad enough that investors in Bitcoin value are looking at a historical mountain up the price chart with a six month high of $8,500 and a one year high of $20,000 – but now they’re looking at a sudden move from around $6,500 down to, as of press time, a disappointing $5,600 and change.
Even more depressingly for the very short term investor, analysts are talking about this new low as the “real deal.”
In a piece today at NewsBTC, Aayush Jindal talks about the BTC “nosedive” and the prospects for a reversal.
“If there is a recovery, the price is likely to face sellers near $5,615 or $5,815” Jindal writes, citing Fibonacci retracement levels that would indicate barriers against bigger gains. “Looking at the chart, Bitcoin price decline below $5,800 looks real. There could be more declines below $5,400 after the current correction wave is complete. The main support below $5,400 awaits near $5,100.”
Others talk about possible reasons for the selloff, including a specific kind of profit taking.
“Bitcoin investors in the United States are selling off their crypto to pay off capital gain tax,” writes Andreas Kaplan today at Smartereum. “First-time investors in Bitcoin are faced with large capital gain taxes from the profit they made in 2017. Reports show that they are now selling off quickly before they file their April taxes.”
“It’s not been a pretty year for anyone who owns Bitcoin, but the last 24 hours has been a period to forget as the cryptocurrency dropped below $100 billion in market cap for the first time in more than a year,” writes Jon Russell at TechCrunch looking at today’s activity. “You have to go back to the end of October — the 29th to be precise — for the last time that the total circulation of Bitcoin in the market dropped below $100 billion … It looks like this will be the first 24-hour period to hold that rate — so much for the relative price stability that many in the industry had complained about, be careful what you wish for!”
None of that precludes bigger gains for Bitcoin by next year, or five years from now, when blockchain technology insinuates itself deeper into fintech, and new programs bring infusions of cash to Bitcoin-related projects. But on the other side of the coin, none of that matters right now for traders and investors who would want to take out their gains within a few weeks or months.
By any accounts, it’s a bloodbath. It’s a kind of situation where anyone with a stake in Bitcoin wants to be able to buy and hold.