Bitcoin Price Plunge to $1,000 is Possible, Say Traders; Could it Happen?


ZZ - Bitcoin Price Plunge to $1,000 is Possible, Say Traders; Could it Happen?

Bitcoin 2-Year Chart (Source: Coinmarketcap.com)

The last time the dominant cryptocurrency showed an extended period of stability, it dropped from the $6,000 region to $3,122, by nearly half.

Some traders have suggested that BTC could become vulnerable to a similar downside movement in the near-term if it fails to demonstrate momentum.

Momentum is Key, Bitcoin Has to Break Out of $4,000

Historical performance is not a guarantee of an asset’s future performance and as such, it has to be only cited as a reference.

In late 2018, Bitcoin did show weakness after falling from $6,000 to $3,122 in a short time frame following two months of low volatility.

But, during that period, the sentiment around cryptocurrencies as an asset class was on the decline and investors were still recovering from the intense 85 percent correction of the crypto market.

The longer we stay stuck in this range the more I feel like we will mirror the price action from September 20, 2018 – November 25, 2018. This is what that would look like. $BTC #Bitcoin pic.twitter.com/oaR7VTA4dk

— Financial Survivalism (@Sawcruhteez) March 2, 2019

Moreover, at $6,000, Bitcoin was down about 70 percent from its all-time high at $20,000 and most investors were confident that the asset had not established a proper bottom.

Throughout the past five corrections, BTC has tended to drop by around 85 percent on average from its all-time high to find a bottom to initiate an accumulation phase.

As cryptocurrency technical analyst with an online alias “Hsaka” suggested, when zoomed out, the price chart of BTC demonstrates the asset’s resilience from steep corrections and its ability to recover in longer time frames.

$BTC

We are here. pic.twitter.com/OaclTNLynl

— Hsaka (@HsakaTrades) March 2, 2019

Previously, Jeff Sprecher, the chairman of the New York Stock Exchange, said that despite several long-lasting bear markets and the emergence of many cryptocurrencies with seemly better technologies, Bitcoin has found a way to survive time and time again.

“Somehow bitcoin has lived in a swamp and survived. There are thousands of other tokens that you could argue are better but yet bitcoin continues to survive, thrive and attract attention,” Sprecher said, adding that ICE will continue to build an infrastructure surrounding BTC through Bakkt, a regulated cryptocurrency exchange.

Since 2015, for four years, Bitcoin has consistently recorded higher yearly lows and if the asset follows the trend of its historical performance, it is highly likely that BTC will remain above the yearly low of 2018 at $3,200 by the year’s end.

Crucial Sign That Shows Investors are Comfortable With Price Range of Crypto Assets

While some analysts have emphasized that institutional investors are not concerned about the price of crypto assets but rather on the existence of regulated custodial services and investment vehicles, the low prices of crypto assets could continue to appeal to institutions.

Throughout 2018, Grayscale reported that institutions have invested over $250 million in its cryptocurrency investment vehicles. In February, Morgan Creek revealed that two U.S. public pension funds invested in its crypto fund.

A potential retest of the 12-month lows of Bitcoin always remains a possibility but in consideration of the relatively fast movement BTC has shown from mid-$3,000 to $4,000 in the past month, many traders expect BTC to move toward the $4,200 resistance level once again.

As Alex Krüger told CCN, BTC experienced a pullback once it reached a major resistance level at $4,200. “Lots of levered longs piled up. And people FOMOed in. BTC reached the first level strong resistance ($4200) and a correction ensued,” he said.

But, it is too early to determine whether that minor pullback could lead the asset back to its yearly lows in the near-term.

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