Bitcoin Drops 5% to $7,000, Drowning in Sea of Good News

Francisco Memoria
  • Bitcoin, the flagship cryptocurrency, dropped over 5% in the last 24-hour period, despite being surrounded by a sea of good news.
  • What's behind the drop is unclear, although a Goldman Sachs report may have something to do with it.

The cryptocurrency ecosystem has been enduring a bearish trend for the past few months, one that seemingly isn’t over yet, despite a plethora of good news coming out this week. At press time, most top cryptocurrencies are down anywhere between 2 and 5%.

Bitcoin, the flagship cryptocurrency, has recently seen its price drop from a recent high of over $7,500 to about $6,000, before recovering to about $7,050 at press time, according to CryptoCompare data. In the last 24-hour period, the cryptocurrency dropped 5.12%.

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Notably, bitcoin dropped below the $7,000 mark for the first time in three weeks this weekend., after dropping over $300 in a three-hour period. What’s behind the cryptocurrency’s fall is unclear, as it’s seemingly drowning in a sea of good news.

As CryptoGlobe covered, the ICE, owner of the NYSE, has recently revealed it’s working on a crypto initiative that’ll see it launch a company called Bakkt. Bakkt will “leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets,” and will allow companies to accept digital currencies as a payment method.

Starbucks’ vice president of partnerships and payments, Maria Smith, was quoted as saying:

As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks.

Maria Smith

Bakkt will further take advantage of the ICE’s US futures market to list a physically-settled one-day bitcoin futures product that’s set to launch in November, pending regulatory approval. The announcement was seen by hedge fund manager Brian Kelly as the ”biggest news of the year” for bitcoin, as it “paves the way for bitcoin ETFs.”

The trading volume of Square’s Cash app has also increased, as it was recently revealed the company doubled its earnings from bitcoin trading to $400,000 this quarter. This, at a time it was revealed it quietly moved its trading service to over-the-counter (OTC) desks.

What’s Behind The Fall?

While analysts haven’t yet pointed out what may be behind the cryptocurrency’s price drop, a recent Goldman Sachs report may have something to do with it. As covered, the report claimed cryptocurrencies “will not retain value,” and noted they are getting more attention than they deserve.

Moreover a NYSE trader revealed in an interview with Yahoo! Finance that bitcoin is “very iffy right now” in the eyes of most traders at the exchange. This could show traders’ sentiment hasn’t changed, despite the ICE’s announcement.

Nevertheless, bitcoin’s hashrate has been steadily growing, and recently topped 52 exahash per second. This may be a reason to remain bullish as former Wall Street trader Max Keiser pointed out earlier this year the flagship cryptocurrency’s price follows its hashrate