There is no doubt that Bitcoin has been on a bit of a rollercoaster over the past seven days. From hitting the heady heights of almost $9100 before falling to $7667 at the time of writing, not much is known or can be guessed about where it is heading next.
Rallying to dizzy heights not seen since December 2018, the world’s most popular and well known cryptocurrency benefited from increased buzz, more social media activity, and strong prospects for the future.
Month-by-month, the value of the digital asset has increased exponentially more than 60% but the reasons behind its current downturn are unknown.
The crypto started off the week on a negative note with the value shedding 7% on Monday morning. This sell-off went through to Monday where prices dipped to a 2.5 week low of $7432. Prices then offered a small recovery up to $7970 but this was short lived by the early hours of Wednesday morning.
Since then, the values have somewhat fluctuated and Bitcoin has been unable to produce a stronger corrective rally, much to the disappointment of investors. Some say we could even see prices drop further to around $7500 before the week is out.
But it is not just Bitcoin that has experienced a drop- its decrease in value has been a symptom of drop across the market with other leading cryptocurrencies experiencing losses as well.
Ethereum for example broke through its bearish vibe to experience a plummet in prices- value it is yet to recover. Currently trading at $242.28 at the time of writing, it has a market cap of around $26,455,046,736 yet is expected to bounce back in the next 24 hours. With a return on investment of 8,683% it is still a savvy move for investors.
But why did Bitcoin drop? Rumours are circulating that it is due, in part, to some well placed fake and misleading news. First up was the founder of Bitcoin, Craig S Wright filing a copyright claim over the original Bitcoin whitepaper.
Calvin Ayre later said that this was proof that Dr Wright is Satoshi Nakamoto, the original creator, but the US Copyright Office debunked this when they noted they hadn’t verified it, they had just registered it. The above tweet from Ayre was attributed to a massive rally in Bitcoins value, despite it not being true.
Other reasons for its demise have been put down to Bitcoin whales moving significant amounts of Bitcoin from off-exchange wallets to exchanges. Over $400 million in BTC was moved by one user onto Coinbase, over three separate transactions. Whilst not illegal, these maneuvers are often done to trigger dips in the market or to get everyone to sell off their BTC as they think a drop is imminent.
Back in the beginning of May, a big market dip was blamed on just one investor who decided to sell off 5000 BTC on Bitstamp. This resulted in a huge sell-off and the resulting crash wiped $10 billion off the market cap in less than 10 minutes
Despite Bitcoins uncertain peaks and troughs, overall adoption rates are up. Chainanalysis Inc, a New York based crypto research firm confirmed that Bitcoins total merchant volume is up 50%, showing that the anti-crypto vibe from some merchants and businesses over the last 18 months, could be diminishing.
Chainalysis Inc said in a statement:”While merchant-services activity represents a small portion of Bitcoin economic activity overall, recent data suggests this activity may be rebounding following the 2018 price downturn.”