What happened to Bitcoin last week?
Today, we would like to take a look at the rather sudden fall in price which happened last week and is currently slowly recovering. Can it be connected to MT.Gox’s 8200BTC worth more than $60,000,000, and is the dumping news real?
Price movement
Within past two weeks, the overall price movement of bitcoin seemed rather positive. It was constantly raising finding resistant and few points, however always coming back after the small falls. If you look at the price chart from May, it brings resemblance to stairs and looks like bitcoin tries to take steps, raising and falling again, yet always fluctuating in the $9000 region.
There was one most notable moment, when it tried to break the $10000 mark, however it failed, reaching around $9950. Many experts wonder if it is purely psychological barrier or are there any notable hurdles.
In the current state of mainstream adaptation, usefulness and actual usage, it seems reasonable not to break the $10000 mark yet. Many people tend to forget, that bitcoin was created as an improved type of currency. And as a currency, should therefore be used regularly for buying goods, services and paying for various expenses. However, people seem to be afraid of spending it and prefer to look at it as ‘investing opportunity’ instead of ‘functional currency’. As a result, bitcoin has become a more speculative asset and its price may not reflect the actual value. That’s why experts think that is it healthy for bitcoin to wait at the lower prices, before heading to the all time highs again. It gives time for more technological improvements and wider adaptation and more utility for cryptocurrencies.
MT.Gox news
When the sudden fall happened, many people connected it to the MT.Gox situation and the trustee’s 8200BTC which allegedly are to be dumped on exchanges. There were already few such cases in the past year, when a significant amount of bitcoins were suddenly dumped and affected the price greatly. However, such cases cause only temporary lows and the price will most likely recover without any problems.
Korean Exchange problem
Another possible cause of any potential falls is the situation with Korean Exchanges. Many experts assume that the UPBit raid may have the impact on cryptocurrency prices. Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital said: “The last time South Korea raided their ‘top exchanges’ was on January 10th, and Bitcoin’s spot price saw a -7% decline on intraday trading that day as well,” He also added: “As is so often the case, an event that should rightfully cause turbulence in a specific region seems to be creating shockwaves globally. The Upbit raid is not the first of its kind, and the markets overreacted in past similar instances as well. As the market continues to mature, these events should grow fewer and farther between, and investors will grow thicker skin.”
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