Back in December 2017 Bitcoin (BTC) climbed to a high of nearly $20K, sparking a rush for digital currencies of all kinds. Since then, however, the token has plunged back down to earth and much of what has been happening lately suggests that this could be getting worse.
In little over a month, BTC has moved steadily downward from its price of $10,796 set on February 28. Although the token rallied back to a high of $11,639 on March 5, it has been struggling to maintain its grip on its lofty valuations for a while since then.
It’s difficult to pinpoint exactly what is the source of BTC’s trouble, especially at a time when a few other digital currencies are having their best run in the digital currency markets. Some are pointing to a growing clampdown by various governments on digital currencies in general. Governments across the EU have stated openly that they believe Bitcoin and other cryptocurrencies are not stable and pose a significant risk to investors. Many have hinted at creating regulations that will see digital tokens coming under tighter scrutiny. There is also a worry that digital tokens are now becoming a haven for all things nefarious. Critics point to the high degree of anonymity which digital tokens like BTC provide. The fear is that this kevel of anonymity could provide a cover for people who would seek to break laws.
But the explanation seems more technical that political for the most part. At least that’s what it looks based on a recent report issued by analyst Mike McGlone. In a Bloomberg piece Mike pointed to the fact that BTC has hit a key inflection point that has seen it cross, bearishly, its 50-day moving average. The big decline has prompted Mike (and others) to suggest that the digital token will drop even further in value.
In trading on Thursday BTC fell 14%, sending the price below $7K for the first time in months. At around 9 pm on Thursday one BTC was selling for $6,890, a far cry from the lofty near-$20K valuation that the token achieved back in December.
Still, there are many investors and traders who are clinging to the hopes that the token will recover. For these committed evangelists, BTC is the standard by which all token will be judged and it is insane to write it off as useless. Whatever the case, the digital token is falling and so it will be interesting to watch how things develop.