Bitcoin is struggling to stay above the $6,000 level, after plummeting below the critical psychological mark over the weekend. Analysts and experts have already weighed in on the recent drop with some remaining convinced that the cryptocurrency will drop even further despite reaching yearly lows.
Bitcoin has been on the receiving end of the past month after initially struggling to take out the $10,000 mark on rallying to the $9,500 level. The bear run has seen volatility clock one-year lows as investors wait to see if it has reached the floor.
London FinTech Week Founder Luis Carranza attributes the recent sell-off to smart money finding its way into the industry. Last year, Bitcoin enjoyed an impressive run that saw it clock record highs of $20,000. The rally was mostly fueled by speculation even as professional investors maintained a cautious approach from a distance.
Fast forward things have changed, and high net worth professional investors are increasingly taking positions in the space something that seems to have had a significant impact on the marketplace. Talk of regulation of the marketplace has also gone a long way in influencing price swings as cryptocurrencies start to trade on fundamentals rather than speculation.
According to Mr. Carranza, as the cryptocurrency marketplace become more mainstream, investors should expect the price of bitcoin to continue dropping, before it finds a critical support level.
?Crypto is unpredictable. There are massive spikes and drops. $4500 could be the bottom, but nothing is preventing $2500 from being the bottom. Likewise, as crypto becomes more mainstream, the price tends to rise. Even if the price drops to $1000 nothing is preventing another surge to $14, 000,? said Mr. Carranza.
In view of the recent bar run, market analyst and trading mentor at London Academy of Trading Gavin Pannu believes regulation will, in the long term, spark another bull run back to the highs. Central Banks around the world have for the longest time been doing due diligence and research on cryptocurrencies. An optimistic view by the regulators is expected to be the main catalysts that will trigger a bounce back of virtual currencies on easing investors? concerns.
Disclaimer: Nothing in this article should be construed as financial advice in any way, nor as an encouragement to engage in cryptocurrency trading activity. This article was not sponsored by any entities or companies mentioned in the article. The only purpose of this article is to inform/educate on the topics discussed in the article.
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