What goes up must come down, the same is true for Bitcoin’s price. After a month long rally to a high of $2760, the price dropped to a low of $1850 ultimately decreasing by 33%. That is quite a large swing, which has surely taken new investors by surprise. However, many would agree that the recent price rise resembled a bubble and this crash was to be expected.
Right around the time when BTC’s price reached an all time high, The Merkle reported how Dan Bilzerian announced to his fans that he bought “a shitload of bitcoin.” Unfortunately, that investment isn’t looking so good as of right now, as each coin suffered at least a $600 drop.
Many traders may be looking for a reason for this incoming crash. Since nothing has really changed in regards to Bitcoin news, this is just a healthy correction. One cannot expect the market to break all time highs day after day with no repercussions. Furthermore, the fact that the correction is holding above the $1900 level is a good sign. In fact, even after this crash, Bitcoin is still up 50% in the past 30 days.
It looks like CNBC’s analysts have reported that Bitcoin’s price may crash as much as 47%. According to Nicola Duke, an analyst at analysis platform Forex Analytix:
“The price is likely to hit $1,780, but could even fall as far as $1,470.”
Duke used Fib Retracements to make that conclusion. Since CNBC is one of the highest traffic news sources, many traders have possibly acted on that news article.
While Bitcoin’s price may experience extreme volatility in the short term, the long term trend for the cryptocurrency’s price is upwards. With the possible coming UASF on Aug. 1st, and the progress with the scaling debate, Bitcoin’s support will only strengthen and its price is bound to increase.
During this volatile times it is also a good reminder to never trade based on emotion, also called “FOMO” trading. Fear of missing out is the leading cause for bad trade moves as they are usually based on greed and result in falling prey to bear and bull traps.
Dislaimer: This is not trading advice, this article is for educational purposes only. If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.