Which occurrences determine the price of Bitcoin? Why is that pressure on the price of Bitcoin? What is the reason for the huge drop in the price of Bitcoin? Why is the correction such excessive? Let’s have a look on the two main influencing variables.
Criminal activities in the milieu of Bitcoin.
Governments worldwide seized Bitcoins worth more than 3.8 billion USD . They started to sell this huge quantity of coins, which makes a huge pressure on the Bitcoin’s market value.
The calm before the storm.
Like on any other cryptocurrency with a fixed number of coins, there exists a relation between the number of Bitcoin users and the price of the Bitcoin. As the price of a coin increases with a growing number of users, a cryptocurrency has no inflation on the long term. With a fast growing community, the price of the Bitcoin knew only one way: up, up and up like a rocket. However, things are changing to the bad right now. For several reasons, the number of Bitcoin users will rapidly shrink on the short and middle term. Because of the relation between the number of users and the price of the coin, we will see a fast drop in the price of the Bitcoin and it will not recover from the low price on the short term.
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Technical analysis
After a sharp drop from 17174 down to 9005, the price is consolidating right now. The consolidation range may go up to the red dashed line at 12787. Above that line, a lovely bullish scenario of riches and wealth is waiting. However, will the price of Bitcoin achieve to regain the bull-trend and go towards 22500 and 24000?
It is more likely that Bitcoin fails to break that red dashed line and remains in the bear-trend. If this is the case, after testing the level of 12787, a sharp drop in the price down to 5568 will follow. I personally think that it is a good idea to sell Bitcoins during this current consolidation phase and avoiding a huge loss.
Disclaimer
I sold all my Bitcoins and I will rebuy them once the price of the Bitcoin will be below 6000. I publish my personal opinion and not a trading recommendation. It may be that I change my mind without an announcement. Everybody has to take his own decisions and is responsible himself for his trades.
