Bitcoin price: Cryptocurrency drops seven per cent but experts not worried

Even though Bitcoin had a massive drop, its recent downturn is actually good news for the continued survival of blockchain, according to one expert.

Any hopes of a last minute rally for Bitcoin as the end of the year approaches have been dashed after the coin dropped drastically overnight.

On Wednesday morning, Bitcoin investors woke up to a 6.77 per cent decline — which was the sum total of its gains last week.

The 24-hour drop is more of the same for the blockchain.

Over the last seven weeks, bitcoin has been marred by price plunges ever since it hit its all-time high of nearly US$69,000 (A$95,000) in early November.

Since then, the coin has been hovering around the US$45,000-US$48,000 mark — shedding more than US$23,000 (A$31,000) of its value.

Last week, BTC briefly pushed past the US$51,000 (A$70,000) mark but at time of writing, the coin was worth just US$47,800 ($66,000).

However, the recent downturn is actually good news for the continued survival of bitcoin, according to one expert.  

Katie Stockton, founder of US investing firm Fairlead Strategies, previously warned that if bitcoin dipped below US$44,200, its price could go into free fall depending on investors’ reactions.

She predicted that US$44,200 could be a “support level” for the cryptocurrency — which means demand could pick up because the lower price is attractive to buyers but not so high that sellers will be dump their tokens.

However, if bitcoin continued to fall beyond that price, “important long-term support at the bottom boundary of the weekly cloud will likely be tested, near $37,000,” she told Bloomberg earlier this month.

However, in a more recent note, Ms Stockton said the fact bitcoin was staying relatively stable and well above this support level was a good sign.

Overall, this caused the investing pro to conclude that bitcoin’s long-term outlook is still positive despite the slight blip over the last two months.

She changed her position on the coin from bearish to neutral over its recent performance.

BTC “remains solidly in a long-term uptrend … and our long-term gauges still point higher despite having down-ticked this month,” Stockton wrote.

She said the next key marker to hit would be US$54,600 to US$55,600.

If bitcoin could push past those numbers, it would be conceivable that it could then sit around US$65,000, which would become its next long-term resistance, Ms Stockton added.

Speaking to news.com.au last week, Greg Rubin, head of trading at Aussie firm Global Prime, predicted bitcoin would have a huge price surge early next year.

The investing expert reckons bitcoin has one more bull run left in it before it stays at a low price for a long time.

He estimates the top-ranked coin will hit between $US114,000 ($A158,000) to $US130,000 ($A181,000) in the first quarter of 2022.

However, after that, prices would drop dramatically, where they would stay until the next surge.

“Looking at the scale of probabilities, it seems the most likely end to the bull run that kicked off in 2020 will be next year,” he told news.com.au.

Bitcoin’s price would plunge to $US10,000-$US20,000 ($A13,000-$A27,000) mark, a drop of around 70 per cent, where it would remain for some time.

“When the volatility dies down, it [bitcoin] will meander on low volume for years,” he explained.

Read related topics:Cryptocurrency


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