Bitcoin suffered one of its most turbulent weeks since its inception as it suffered a flash crash last Saturday and shed a whopping 14% off its value.
However, the crypto managed to bounce back fairly quickly on Monday as it hit the $56,500 mark. That rally was unfortunately short-lived as this rebound fizzled unexpectedly.
Bitcoin’s price then fell a staggering $53,700 in just five hours, causing a bit of a shock to a market that has been expectantly bullish.
The surprising price plunge over the weekend puts an end to a month-long surge that found its apex at $64,500 on April 14. This price spike didn’t just benefit Bitcoin users and holders, but it also boosted Coinbase’s IPO that helped the cryptocurrency exchange reach a $100 billion valuation at one point.
BTC’s price remained largely volatile $57,400 yesterday. But as soon as it failed to break through the $58,000 resistance, the price assumed a fresh decline that found support at $54,623 in a few hours.
Bitcoin isn’t the only crypto that’s suffered massive price slides, though, as other major altcoins such as ETH and XRP also went full bearish mode.
ETH’s price hovered above the $2,500 mark on April 16, and it’s now down to just $2,081 as of writing. Meanwhile, XRP’s $1.94 high on April 14 plummeted to just $1.23 on Tuesday.
As a result of this bearish climate in crypto, Coinbase’s shares also sustained a 2.6% downtick in Monday’s trading.
Factors Leading to Bitcoin’s Price Drop
According to reports, one of the major causes to Bitcoin’s price drop was because of talks about banning the crypto in Turkey. Jefferies FX Global Head Brad Bechtel also says that the coin is getting an increasing level of scrutiny from the US Treasury.
Aside from these negative perceptions about Bitcoin coming from various governments, analysts also point out that the increasing saturation of the crypto market is to blame for Bitcoin’s bearish trend. China’s plans to create their own digital Yuan for the 2022 Beijing Winter Olympics is also believed to be another major reason for the downbeat mood among the top cryptos.
Looking at the Brighter Side
But it’s not all downhill from there as there is still a growing number of bullish backers that can bring back Bitcoin’s surging price.
One good example is the Bank of England’s Central Bank Digital Currency which will be supported by a new task force department that will explore its uses.
Brown Brothers Harriman Global Head of Currency Strategy Win Thin says in a statement that Bitcoin’s price drop is only temporary, and that the factors aren’t strong enough to fully pull crypto adoption to a standstill due to the ever-expanding commercial investor adoption trend.