Bitcoin is very volatile, there is no question about it. If you’ve been following the rise of this cryptocurrency carefully since it’s beginning, you’ve seen corrections of more than 50%.
Looking at the Daily Bitstamp chart of Bitcoin, we can see that in the last 4 days of trading BTCUSD has suffered some losses. From it’s high at 19,700 the currency dropped 21.80% to the low of $15,400 yesterday.
This bearish sentiment could be attributed to many factors. No asset in the world will ever keep going up vertically. The markets would never allow it, as there will always be traders who are willing to enter short positions.
A drop of about 22% is still not a major move for Bitcoin and if you happen to be a Bitcoin holder, this is definitely not the time to go into a panic mode.
Today BTCUSD seems to be regaining some strength and will possibly reverse some of the losses in the upcoming days of trading.
Possible causes for Bitcoin’s correction
Pinpointing a single cause of this correction is very difficult as market corrections are inevitable. Corrections usually take place amid new negative news, which Bitcoin has seen quite a bit in the last couple of days.
News ranging from articles about Bitcoin Cash replacing it’s Bitcoin ‘mother’, higher transaction costs and network congestion due to high demand, short contracts in Futures trading, recent hacks of exchanges, these will all play a part and reflect in the market price of Bitcoin.
Note. This post is for educational and entertainment use only and it is not an invitation to trade. Trading involves high risk to your capital.