Image credit: source

What goes up must come down, especially when it comes to bitcoin: Its price has plunged again after breaking through the psychological $4,000 barrier over the weekend.

The price of bitcoin started heading upward on Feb. 7 in a possible end to a 13-month bull run, climbing from a low of about $3,300 through to near $4,000 Feb. 18.

In the week since, bitcoin maintained a trading band between $3,800 and $4,000 until late Saturday, when the price rallied above $4,000.

Bitcoin’s price peaked at $4,157.90 at 2 a.m. EST Sunday before profit takers stepped in, knocking the price down to $3,767.37 as of 8:30 p.m. EST.

Although it’s too early to suggest that it might be the end of a mini-bull run, with bitcoin’s price returning to nearly the same price it had sat for the last week, something strange has occurred.

“The cause of the sudden sell-off was not immediately apparent, however, when prices have risen and fallen quickly in the past it’s been put down to traders and investors profit-taking and flooding the market with surplus digital tokens,” Forbes reported.

What is clear is that investors were moving extremely large amounts of bitcoin through exchanges. According to NewsBTC, Binance, the world’s largest cryptocurrency exchange, faced delays “as they incurred an all-time-high trading system load earlier today.”

There’s no apparent evidence of market manipulation, but the same report noted that the recent surge in volume “signals that cryptocurrency traders are becoming increasingly keen on finding trading opportunities during the relatively quiet market conditions.”

One theory for bitcoin’s price surge, though not its subsequent drop, is interest in a forthcoming Ethereum hard fork. In a hard fork, the blockchain behind a cryptocurrency splits into an old chain and a new chain.

In an ideal world, everyone would support the new chain, but in practice what usually occurs is that some support the new chain and some the old chain. That creates two cryptocurrencies, with investors in the original blockchain credited with tokens in both.

Since early February, Ethereum has increased in price by as much as 60 percent as investors flooded into the cryptocurrency on the expectation that it may split into two.

Bitcoin usually leads the price movements of other cryptocurrencies, but sometimes increased demand in other cryptocurrencies can likewise have flow-on effects on bitcoin. In this case, the price increase in Ethereum may have encouraged a price rise in bitcoin.

In any case, Ethereum dropped further on Sunday than bitcoin did. While bitcoin was down about 8.6 percent, Ethereum dropped 14.5 percent, to $135.79. The higher the up, the further the down.

Image: mikemacmarketing/Flickr

Since you’re here …

… We’d like to tell you about our mission and how you can help us fulfill it. SiliconANGLE Media Inc.’s business model is based on the intrinsic value of the content, not advertising. Unlike many online publications, we don’t have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.The journalism, reporting and commentary on SiliconANGLE — along with live, unscripted video from our Silicon Valley studio and globe-trotting video teams at theCUBE — take a lot of hard work, time and money. Keeping the quality high requires the support of sponsors who are aligned with our vision of ad-free journalism content.

If you like the reporting, video interviews and other ad-free content here, please take a moment to check out a sample of the video content supported by our sponsors, tweet your support, and keep coming back to SiliconANGLE.

(Excerpt) Read more Here | 2019-02-25 02:11:29

LEAVE A REPLY

Please enter your comment!
Please enter your name here