Bitcoin (BTC) Keeps Closer to $7,400, Further Correction Expected
BTC moved down on the day of Mark Zuckerberg’s testimony before the House of Representatives.
Bitcoin (BTC) started making its long-awaited downward move, creating expectations of a pessimistic end for 2019. BTC crashed within minutes into the $7,700 territory, then extended the losses to a daily low of $7,469.32. The continued slide in BTC is a wakeup call to those that predicted a non-stop appreciation.
BTC traded at $7,457.55 on Thursday as of 7:40 UTC, as accelerated selling expanded volumes to above $22 billion in 24 hours. More than 2.9 billion BTC were traded, returning the leading coin to higher volatility.
The BTC scenario recalls the fall of 2018, when stabilized prices around $6,000, then crashed to lows around $3,200. BTC now once again sees the possibility of sliding toward $6,000.
Despite the increased volatility, BTC is in a much better shape in comparison to previous years. Mining is as active as ever, setting out to break new records. The Bitcoin network’s hashrate broke above 110 EH/s again, setting out to achieve new highs.
Miners also may not present a significant selling pressure, as the block rewards are now sufficiently low, producing 1,800 BTC per day. In a few months, the daily reward will fall to 900 BTC, and miners have moved on to preserving the coins, or selling them OTC.
Selling pressure may be caused by “whales” who recently sent thousands of BTC to exchanges. And while in the fall of 2018 the selling was suspected to originate from the wallets of the Mt. Gox trustee, in 2018 there may be other selling pressures. The Plus Token scheme was seen sending tokens to exchanges, and there are other unknown wallets moving funds to Binance, Huobi, OKEx, and others.
The recent price drop for both BTC and altcoins also follows a significant withdrawal of South Korean traders. Exchanges in general see an outflow of activity, aiming to compensate with additional services such as staking or crypto-lending. BTC, however, is seen as a potential source of growth.
One of the reasons for the drop in BTC is the futures market. The first major slide for BTC was triggered on September 23, the day of the launch of the Bakkt physical delivery futures. BTC erased about $2,000 to move down to the $8,000 range, before moving even lower.