In my post of a little over a week ago which I entitled ‘Bitcoin et al….look out below’ and to the annoyance of many crypto fans, I suggested that the price of Bitcoin was set to collapse once the technical support region at $10,000 had been taken out.
As expected this has duly occurred with Bitcoin now trading well below this level at $8,603 at the time of writing, but this is just the beginning with far more dramatic moves to come as this cryptocurrency, along with all the others, finds more natural levels of value in the single and double digit price areas. No doubt this will leave many very different emotions. A few of the early adopters will have made vast profits, whilst those traders and investors who jumped in late on FOMO (the fear of missing out) will now be regretting their decision, living in hope of a recovery to exit at breakeven, or more likely facing a rapidly increasing loss as they are now caught in the headlights of indecision. For those who have stood on the sidelines, and now watching this collapse must be relieved this decision is being vindicated, and perhaps even feeling a degree of schadenfreude.
A salutary lesson, and one which will no doubt be repeated in the future, as our memories are always short, and we soon move on to the next mania or market which promises untold riches.
However, this is not to decry the technology of blockchain which is here to stay. But for Bitcoin and many cryptos, prices are now set to fall driven by a variety of factors, not least the rising selling volumes coupled with the lack of buying volume, which in this market of supply and demand dictates everything.
So where next for Bitcoin? And the major technical support levels suggest a pause at $4,482, followed by $2,779 and finally down to the $1,000 region. And once through this final level we then move back to three figures and ultimately to two or even single digit values.
By Anna Coulling
Chart kindly supplied by Trading View