Bitcoin’s Price Drops to $4,300 as Analyst Claims We're Approaching a Buy Zone

Bitcoin’s price has been dropping in the last few weeks, so much so that it fell below the $5,000 mark for the first time since October of 2017, and that miners are currently struggling to remain profitable.

Just as some believed a relief rally was in, bitcoin’s price started falling once again, and is currently down by about 3.7% in the last 24-hour period. One bitcoin is currently going for about $4,300, and the cryptocurrency’s market cap is now down to $75 billion.

Bitcoin's price performance in the last 2 weeks

The cryptocurrency’s sell-off has had various effects on its ecosystem. A recent report has revealed the value of bitcoin payments plummeted about 80% this year, although data on these is patchy as some trades with other currencies are often included. Nevertheless, the “Holiday 2018” consumer report revealed teenagers would rather receive cryptocurrency, or Fortnite “V-Bucks” over cash or gift cards.

According to MarketWatch demand for cryptocurrencies may not be down at all, as Jani Ziedins of CrackedMarket revealed a short-term bottom may be close. He was quoted as saying:

Look for the selling to continue over the next few days, but a bounce off of $3.5k-ish that returns to $5k is likely. While that doesn’t sound like a lot given the latest tumble, a bounce from $3.5k to $5k is a nearly 50% payout for just a few days of work.

Ziedins noted that making a profit off of the short-term bounce is “not for the faint of heart,” although he believes there will be “nice rewards for those willing to jump aboard the inevitable bounce.”

Other analysts have suggested that bitcoin may find support at the $3,500 and $3,000 levels.  eToro senior analyst Mati Greenspan tweeted out that he expects the cryptocurrency to indeed find support at these levels, although a bounce before reaching them could be a “very bullish sign.”

Altcoin Sell-Off Continues

The crypto market’s decline didn’t just impact BTC. According to available data most cryptocurrencies are currently down, with Ethereum Classic (ETC), Bitcoin Cash, and Dash dropping the most, as they’re down 8.8%, 7.1%, and 9.1% respectively.

Ethereum’s ether and XRP are both down, by 6.7% and 6.1% respectively. The cryptocurrencies that have been able to, to a certain extent, resist the sell-off are EOS, NEO, LTC, and BTC. These are down by between 3% and 4%.

The decline has notably also failed to affect the number of transactions being processed by blockchain-based cryptocurrencies. As CryptoGlobe reported, the total value transferred by cryptocurrencies is comparable to that of MasterCard, as BTC transactions average $8 billion a day, while MasterCard’s network processes roughly $11 billion a day.

Billionaire Novogratz: Altcoins Won't Pump Like In 2017 Bull Run, Bitcoin Will Dominate

It appears that cryptocurrency prices have finally begun to recover after enduring an extended bear market which lasted throughout 2018.

As the market capitalization of Bitcoin (BTC) and other major cryptoassets continues to rise, several analysts have been drawing comparisons between what they’re seeing in the current market and what they observed during the historic bull market of late 2017 and early 2018.

Commenting on the recent crypto market price movements via Twitter, Ran NeuNer, the host of the CNBC Africa Trader show, remarked:

The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a day...is it coming?

Bitcoin To “Outperform” All Other Cryptos “This Time”

As the bitcoin price begins to recover, there have been many predictions made regarding the anticipated performance of altcoins. Twitter user “Crypto Bitlord” (@Crypto_Bitlord), a widely-followed digital asset market analyst, believes XRP, which currently has a market cap of around $16.3 billion, may trade as high as $10.

However, prominent crypto investor Michael Novogratz believes that digital asset traders are a lot smarter this time, when compared to some of the bad investment decisions they might have made during the initial coin offering (ICO) craze of 2017.

Novogratz, who’s the founder and CEO of Galaxy Digital, a full-service crypto merchant bank, has predicted that in this market run, Bitcoin will “outperform” all other cryptoassets.

On May 16th, 2019, the Bitcoin price surged to a 2019 high of $8,373 according to CryptoCompare data. In response to bitcoin’s recent price movements, Juan Villaverde, the Chief Analyst at Weiss Crypto Ratings, told CryptoGlobe: 

Bitcoin could fall to as low as $4,400. But [if] it does, it will be the best Bitcoin buying opportunity since 2015.

“More Good News For New Bitcoin Users”

Villaverde, an econometrician and mathematician focused on developing various crypto index models at Weiss Ratings, believes bitcoin would be a great buy at a lower price (as suggested above) because of the following reasons:

  • “The usage of Bitcoin is near all-time highs – 450,000 transactions per day. That’s up from a low of 150,000 in April of 2018 and approaching the all-time high of 490,000 in December of 2017.”
  • “Despite the high transaction volume, fees on the Bitcoin network are at their lowest levels since August of 2017 – more good news for users.”
  • “The Bitcoin block size is now greater than ever before, thanks to the Segwit technology upgrade.”

Villaverde further noted that the predictions are “based on studying the time patterns in Bitcoin's rises and falls throughout its 9 year trading history.” He explained that the time patterns have been analyzed by using an “algorithm-based market cycles model.”

The Chief Analyst at Weiss Ratings also mentioned that the bear market “ended on December 15th 2018 and the model confirmed this shift in trend on March 26th of this year.”

He added:

Then, after the rally that took place starting on April 25th, the same model told me a new bull market was now underway. The same model indicated a 30% to 45% correction due as of late April-early May and we seem to be experiencing that right now.