Bitcoin Drops Below $11K for First Time in Weeks
Bitcoin has taken another nasty fall. At the time of writing, the world’s number one cryptocurrency by market cap has dropped into the $10,000 range. It is currently trading at around $10,800 and has dropped below $11K for the first time in several weeks.
Bitcoin Is Falling Fast
As it turns out, the U.S. dollar has begun to recuperate. After months of suffering due to the expanding coronavirus pandemic, the national fiat currency of America and several other countries is beginning to show newfound resilience and garner its place on the financial ladder back. While this is certainly good for the West, bitcoin is bound to suffer whenever the U.S. dollar is in a top position.
Up until now, it was assumed that the U.S. dollar was going to be vulnerable to inflation and other harsh economic conditions. Thus, many saw bitcoins as typical “safe haven” assets. Something that could potentially hedge one’s wealth during times of strife and keep their money safe from harsh monetary circumstances.
For the most part, bitcoin hasn’t really failed people as of late. It has remained resilient and strong, and even crossed into the $12,000 range a few times over the past two months. Sadly, these jumps never really lasted, as $12K has proven too strong a resistance level for the world’s primary form of digital money, and with its latest hop beyond $12K, bitcoin has shown itself still too volatile and weak to sustain the momentum that comes with crossing the threshold, as currently, bitcoin has fallen more than $1,000 below this level.
In addition, it’s clear that the correlation between stock shares and bitcoin has been weakened or is no longer there at press time, as the stock market has been surging as of late while bitcoin continues to drop further.
Are Further Slides in the Immediate Future?
So, what does this mean for the digital currency in the coming weeks? While it’s likely too early to assume that the cryptocurrency should be bracing itself for a sudden crash, some analysts are claiming that further corrections may occur before things get any better for BTC. Mike Novogratz of Galaxy Investment Partners explained in a recent interview that the asset shouldn’t be cut out just yet, saying:
We’ve crossed the Rubicon. Bitcoin is not going away, the Ethereum project is not going away, it’s got critical mass and you are going to continue to see innovation after innovation.
In all, this is the biggest drop bitcoin has incurred over the past 30 days. Many traders never thought that bitcoin would drop below $11,000 as despite its trouble with the $12,000 resistance level over the previous few weeks, the currency had always managed to regain some of its momentum and fall only a few hundred dollars here and there instead of $1,000 or more. The present scenario opens bitcoin up to some heavy price changes, and it’s hard to know how much further the asset will drop before its price begins showing signs of improvement.
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