Bitcoin price: analysts bullish despite recent slump
Rare period of stability suggests the virtual currency may soon rise again
Bitcoin analysts are positive that the cryptocurrency’s value will soon see a much-needed boost, despite prices plummeting by almost $2,000 (£1,600) since the beginning of August.
The virtual coin entered the month just above the $10,000 (£8,200) mark before swiftly rising to its August high of $12,200 (£10,000) six days later, according to ranking site CoinMarketCap.
But in the ensuing weeks, the cryptocurrency gradually slipped back towards $10,000 before sharply falling to $9,450 two days ago, the ranking site says. Bitcoin was trading at about $9,600 (£7,870) as of 2.30pm UK time today.
It’s not all doom and gloom, though. While values may be the lowest they have been in August, analysts believe that bitcoin is showing signs of stability.
Are prices set to rise?
Possibly. As reported by The Independent, one investor noted on Twitter that bitcoin has risen 175% since the start of the year through “slow, organic price increases”. She also claimed that the cryptocurrency’s steady climb over the past eight months “is better than quick pumps”, which are often followed by significant losses.
It’s also believed that bitcoin’s recent declines may simply be the result of “a batch of bitcoin futures contracts”, which safeguard investors against volatility, that are due to expire, the news site says.
Speaking to the Independent, Simon Peters, an analyst at eToro, said: “Chicago Mercantile Exchange Bitcoin futures contracts are set to expire tomorrow, which historically has prompted trading activity within the cash market.
“It’s possible that investors are selling off now to insulate themselves from greater losses in the coming days,” he said. “Furthermore, this downward momentum has been exacerbated by low trading volumes over the last week, which has meant that a relatively small number of big trades have been able to move the needle sharply.”
Peters’ comments were backed up by Mike Novogratz, founder of the digital coin-focused merchant bank Galaxy Digital. He told trading news site FXStreet that bitcoin “has had a huge run, and so I think this is a bit of consolidation”.
Meanwhile, McAfee anti-virus founder and long-time bitcoin advocate John McAfee told his 1.1 million Twitter followers that any investor panicking over the virtual coin’s value slump is “a fool”.