It appears most cryptocurrency markets are still in a state of panic. Virtually all cryptocurrencies are in the red as we speak, which is not a positive sign by any means. China’s dubious messaging regarding exchange activity continues to cause fear and uncertainty, particularly in the Bitcoin market. In fact, the price of a Bitcoin just dropped by another 5% overnight and is now struggling to remain over US$4,000.
Bitcoin Price Keeps Slipping
Just yesterday, it appeared as if the Bitcoin price had reached a bottom near the US$4,200 mark. With the price hovering around that value for several hours, it appeared to be the low for the time being. Unfortunately, that turned out to not be the case, as the Bitcoin price continues to fall as we speak. In fact, we are now heading toward US$4,000 which might not act as a support level either, depending on how markets evolve.
These past 24 hours have been troubling for Bitcoin, to say the least. The price has already dipped below US$4,000 on several occasions, yet quickly rebounded every single time. Right now, there is another minor bounce taking place toward the US$4,050 mark, but it may be rather short-lived as well. Volatility reigns supreme across all markets right now; that much no one can deny. Whether or not this trend will remain in place remains unknown.
With a Bitcoin price of US$4,047 at the time of writing, the future of the world’s leading cryptocurrency is in serious question. Although a major price drop wouldn’t necessarily cripple Bitcoin in the long run, it might have significant lasting repercussions as well. Chinese officials have a habit of successfully spooking markets, and there is no reason to think they won’t continue doing so.
Although the Bitcoin trading volume is still holding strong around the US$1.5 billion mark, it is evident the negative pressure continues to mount. Chinese exchanges were trading well below the market average yesterday and that trend has not changed whatsoever. Depending on which USD exchange one looks at, the gap among sites such as OKCoin and BTCC can be as high as nearly US$600. This represents an interesting arbitrage opportunity for some, although exchanges have certain limits in place as well.
If the negative pressure across all exchanges keeps up, the Western platforms will follow suit eventually. Right now, that would mean the Bitcoin price may drop to US$3,650 or lower in the coming hours. When that happens, Chinese exchanges will continue to trade lower as global panic starts setting in across all markets. We can only hope things never get to that level, although it is certainly possible we will see more change over the coming hours. Bitfinex still dominates the markets in terms of trading volume, and it is actively pushing the USD value of BTC back up right now.
It is evident the Bitcoin price is a lot more volatile right now than it has been for some time. When there is such a large gap in price across trading platforms, a major issue is created. Chinese exchanges are effectively bringing the price down whereas the rest of the world is resisting this trend. Even Japanese and Korean exchanges value Bitcoin higher than the current global market average right now. That is an interesting situation to keep an eye on; that much is certain.