Bitcoin’s upside trend has taken a sudden break, while the price rolled back for around $100 after nearly two weeks of growing steadily. This is all happening just before Saturday, when many Bitcoin supporters will be waiting for the final say of the US SEC. And judging from the current market trends, the price correction might be here to stay, at least for the time being.
There are currently no confirmed reports about why the price drop happened, but only mentions of possible causes. One reason for the reversal is reportedly due to a Bloomberg headline who quoted an official from the People’s Bank of China saying that recent Bitcoin regulations were here to stay, and not just a temporary measure, Business Insider suggest.
This would explain the latest trend in great length, although the information remains unconfirmed. The business portal also suggests that the high-volume selling trend could also be due to “nervousness” about the upcoming SEC approval on the first Bitcoin ETF, which is the more logical explanation at this time.
Selling Trends and High Volume Sweep the Market
During the past 24 hours since our last update on Monday, the price of Bitcoin set on a downward trend that began yesterday morning and has persisted ever since. The peak was reached during early morning hours, when Bitcoin traded around $1269.29, only to start falling down rapidly to the current $1,180 levels.
Market trends show that the price decline coincides with an increase in trading volume, which has again tripled in size and now sits at $348,523,000. The drop also took down the market cap, which is now at $18.98 billion. As always, high trading volume means more room for bigger price changes, especially at this time when sellers have a firm hold on the market.
Our technical analysis shows that the market is heavily pro-sell on a longer time-frame, with 8 out 12 oscillators and 8 out of 12 moving averages sending a selling signal. The SMA 100 is well above the SMA 200 on this time-frame and the Stochastic is already hitting “oversold”, so there’s still hope of the downtrend stopping.
Our short-term signals also show that buyers are picking up pace, with most technical indicators sending a buying signal. This implies that even though long-term trends are pro-sell and suggest a price drop, the SMA 100 and short-term signals hint that it will not be a smooth ride downward. Thus, if sellers return, we might see the price start recovering. If not, a break to $1,100 is more likely.
Bitcoin to Hit $3,000 by Year End?
One interesting update we saw this week was a CNBC analysis on the future trends of Bitcoin. Namely, according to the portal, Bitcoin’s recent rally, the fact that it traded (albeit briefly) for more than gold, and its rapid growth, all suggest we might see the cryptocurrency surge to $3,000 by the end of 2017.
The main basis for this prediction is the geopolitical events which have allowed Bitcoin to grow for more than 190% in the past 12 months, and will likely to do so in the future. The media portal also spoke to several Bitcoin entrepreneurs, who likewise believe the prediction to be based in reality.
Adam Davies, a financial consultant told CNBC that the growth of acceptance and perseverance of Bitcoin, but also political insecurities, will see the price likely to hit $3,000. Blockchain CEO, Peter Smith, also shared the enthusiasm, saying that the Bitcoin wallet is seeing “unprecedented sign ups and volume”, leading him to conclude that the end-of-year prediction is quite “feasible”.