Another alarming dip in the price of Bitcoin has drained momentum out of the cryptocurrency markets and is danger of turning a remarkable ascent into a disappointing slump.
The only direction uttered on the lips of most analysts over the last few weeks has been ‘up’ as Bitcoin (BTC) smashed its own records.
Merely ten days ago, astonished jaws were resting on the chests of just about every enthusiast as the flagship crypto rode a rampaging bull through the ceiling of $60,000 to set an all-time-high of $61,701.
Last night, though, that charging steer threw its rider to a crumpled heap, lying face down and spitting dust out of its mouth around $53,500.
The warning bell had been rung over the weekend, as four attempts to climb above $60,000 met fierce resistance at $59,400 which eventually pushed Bitcoin back below $56,000.
Repeated, and albeit unsuccessful, attempts to climb back above $60k appeared to have exposed enough potential weakness to have drowsy bears licking their lips.
Yesterday’s nosedive began on the 6pm candle with a drop of $800 from $57,305. The market had looked to be settling in the $57,000 to $58,000 range, so there were no apparent causes for great concern.
An hour later though, the downward force on the pullback was strong enough to glue traders to their increasingly red-flushed screens as the next fall came in at almost $1,000.
The following drop cut even deeper as $55,470 made way for $54,442.
A frantic to-and-fro ensued as weakening bulls struggled to establish a line of resistance at $54,500 before resolve was broken and another $1k dip went further towards the gravitational lure of $50,000.
As is typical of the Bitcoin rodeo, altcoins (cryptocurrencies other than the market-leading BTC) usually follow their leader when a significant turn is taken, and today looks like no exception to that rule. A wall of red will be glaring out from most screens this morning as hits are taken across the board.
Ethereum, BNB, Litecoin, ADA, Doge etc all fell off a crimson-coloured cliff that will have left many analysts scratching their heads.
XRP, on the other hand, continued to show weird defiance as the only emerald beacon bobbing about in a sea of green. The native coin of Ripple – whose creators are currently in a legal battle with the US Securities and Exchange Commission – has been defying the odds, the authorities, and the markets.
As Bitcoin was stumbling last night, XRP was touching $0.60, although it too is now looking like succumbing to the effects of a market-wide slump.
After weeks of upward momentum – driven by vast amounts of institutional investment – crypto enthusiasts may be feeling baffled by the sudden dip.
Several theories abound, but the current train of thought seems to point towards US Treasury yields playing a huge role in crypto price movement.
Strong-looking yields, it is believed, send investors looking for safe havens instead of risk-on markets. If this holds true, it may be some time before Bitcoin gets back to the glory days of $60,000 which, despite being only a few days ago, seem like turning into a distant memory already.