- Possible reasons for the recent downtrend in the price of Bitcoin
- The volatility of Bitcoin (BTC) is back
- There are still high expectations on the near term prospect of Bitcoin
Bitcoin News Today – Bitcoin recently saw volatility not seen for quite some time now. After being relatively stable for several months, the price of the digital currency ricocheted this weekend, as it lost more than $1,500 in just a few minutes.
The sharp decline in the price of Bitcoin on Sunday morning was initially attributed to whales that control significant amounts of Bitcoin on the market. Nevertheless, others are saying that it could be because of “algo misbehavior.”
Possible Causes of Bitcoin’s Price Crash on Sunday
Bitcoin amassed bullish traction and surged over the $12k mark early Sunday morning only to plunge to $10,500, losing about 12 percent of its value in a few minutes. However, the digital currency started a sharp recovery and returned to over $11,300 almost immediately.
The CEO of brokerage Exante – Anatoliy Knyazev – said that such massive movements are still inherent to the structure of the digital currency market, with prolific unregulated leveraged trading going on. He added that the sharp plunge could be due to an algo misbehavior. Trades based on time, volume, and price are automated with algorithm trading, with traders programming sell or buy orders to take place when certain conditions are met.
Bitcoin (BTC) Price Today – BTC / USD
Leveraged trading can exacerbate the effects of algorithm trading, and this would allow traders to take larger positions with little amounts of capital. According to Mati Greenspan, there is much leverage now than ever before, especially in digital currency. He said:
“This could result in some extreme volatility. But I believe Bitcoin and the rest of the altcoins on the market are in a bullish market right not.”
However, on the other hand, others are saying that market participants “profit-taking” triggered the sharp decline in the price of the digital currency. The senior financial analyst at FxPro – Alex Kuptsikevich – said:
“Bitcoin has been on the rise, and it touched the $12k mark on Sunday morning. Nevertheless, as a result of profit-taking, the digital currency plunged below $11k. Considering the low liquidity of the digital currency market, a small amount of huge orders can launch waves in both directions.
Many Are Bullish on the Near Term of Bitcoin
Many digital currency analysts, investors, and enthusiasts are expecting the price of the digital currency to continue surging higher. Bitcoin has put up a pretty impressive performance over the past week, and the expectation for the digital currency is very high. Many believe that the digital currency would hit $20k before the end of this year, and chances are the digital currency would hit that level based on its current price action.