Just as we predicted three days ago, we are going through some turbulent times for Bitcoin with high volatility dominating the market at the moment.
We hit $13,200 yesterday and today we’ve touched $11,200, nearly $2,000 lost in one day. That’s a shocking 15% drop in a matter of hours.
Nothing new in the scene, this is Bitcoin at its best. At the end of 2017, in the run-up to $20,000 the asset was very volatile in the months prior to the ATH. It’s doing it again.
What caused the big drop?
On 26th June, Bitcoin reached its most recent high in over a year of $13,880. This was followed in the next days by a big drop back to $9,600 with a fall of 30%.
It’s safe to say that the higher the rise, the higher the drop too and this time it’s no different. It happened again with less loss so far but it followed a quick and sharp rise.
We do not know what will happen in the next few hours or days but experts and professional traders expect in the coming months a similar 80% drop experienced with every fast run-up of Bitcoin. It happened on two specific occasions previously:
- From December 4, 2013, to January 4, 2015, in a 400-day period, the Bitcoin price dropped by over 80 percent, recording the worst correction in its history with the longest bear market recorded for Bitcoin;
- The second happened more recently during the 2018 bear market that saw the asset falling from nearly $20,000 in December 2017 to a low of $3,200 in December 2018. This last time the bear market was shorter but surely just as painful for Bitcoin Hodlers.
What to expect now?
We’re currently seeing a very slight recovery with Bitcoin trading at around $11,600 at the time of writing. On the long term, there is a high chance of experiencing more volatility in the coming days and weeks.
In the next few hours, we will be monitoring the price closely to see which direction it’s taking. A break on the downside of $11,000 and $10,800 might signal a further drop to a $10,500 support and more.
On the upside we should see it breaking back to $11,800 resistance and then $12,200, these are still levels in play.
Overall, in line with what’s been predicted by most experienced analysts, Bitcoin will trade between $8,800 and $14,000 within the next two weeks to a month when Bakkt and Fidelity should officially enter the scene.
We will be able to reassess then. Until that time, we should still expect major volatility.
Chart via tradingview