Bitcoin (BTC) took a battering in the last 12 months, seeing its value plummet from £15,173 ($19,352) on December 17, 2017, to just £2,634 ($3,360) on December 12, 2018. But there were early signs of a bullish bounce back at the beginning of 2019, with bitcoin surpassing the psychologically important $4,000 mark this week. However, investors’ hopes of further gains were dashed on January 10, following a sudden sell off in the space of a few hours.
The crypto market’s intense fire sale could put an end to the recent corrective rally taking place since December 17.
Alex Krüger, a cryptocurrency trader, believes a fall below $3,600 could result in another slump in the $3,000 and $3,500 price range.
Mr Krüger said: “What a majestic dump. BTC back to my buying area of $3,500 – $3,600.
“Below $3,300 exit and reassess. I’d like to see BTC ending the day above $3,700.
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“Consolidation below $3,600, the bottom of the prior area, would tilt the balance towards further downside.”
Another cryptocurrency trader Crypto Dog echoed Krüger’s attitude, believing new lows for the ailing cryptocurrency are on the horizon, at least in the short-term.
He said: “Not setting heavy bids but I would like to see BTC at $3,400 and ETH at $115.
“No reaction there and I think new lows are on the table.
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“Nothing to stress about, all par for the course, cycles matter, long Bitcoin (without leverage) and continue shorting the banks they’re wrecked.”
It is now widely believed the “bitcoin bubble” has burst and digital assets are demonstrating wild volatility in a low price range.
The dominant cryptocurrency showed virtually no signs of a major trend reversal throughout December and January, struggling to recover beyond the $4,000 region.
Bitcoin is expected to remain volatile for the foreseeable future, as low market cap crypto assets struggle to deal with intensifying sell pressure.
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The cryptocurrency market as a whole lost more than £12.5billion ($16billion) in valuation as crypto assets’ daily volume of rose from £11.7billion ($15billion) to £18billion ($23billion).
This is mainly because of swelling sell volumes and sell pressure on low liquidity assets.
Cryptocurrencies with low market caps and low volumes have this week seen substantially larger drops than bitcoin .