BTC Cracks Below Key Support Level, Further Woes In Store
Since scaling dizzying heights two years ago when it rocketed past the $ 20,000 mark, BTC has never really regained its past glory.
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Bitcoin, the beleaguered cryptocurrency that was not too long ago the darling of traders and hedge fund managers alike, cracked below a very key support level last week as prices fell below the lower Bollinger Band channel in the wake of no real positive news flow for the controversial asset.
Since scaling dizzying heights two years ago when it rocketed past the $ 20,000 mark, BTC has never really regained its past glory. Although it showed some signs of life when it went past the $ 13,000 mark very briefly in July this year, it has since then, already retraced more than 50 per cent from these highs too. Note how combined trading volumes across bourses have dropped to merely one-fourth of the its 2017 levels, indicating a steadily dwindling level of interest in BTC.
Plagued by regulatory woes as well as security glitches, Bitcoin is now quite likely to go into freefall mode from here, and may even test its December 2018 lows of 3200-3300 in the times to come.
In the absence of any fundamental use of Bitcoin, the digital currency has been at the receiving end of wildly speculative projections, with bull case projections going beyond $ 100,000 and bear case projections going as low as $0.
All in all, it does seem quite unlikely that BTC will fulfil its once glorious promise of replacing fiat currency and opening up trading channels that were hitherto unheard of. Not many retailers are accepting Bitcoin anymore, and in the absence of real use cases, it’s hard to envisage a ‘digital gold’ scenario in the Bitcoin’s new future.
Despite some initial interest from online merchants, the volatility of the asset class has thrown a spanner in its works; with many having raised the very valid point that for a currency to be a legitimate store of value, it must be stable. Bitcoin, on the other hand, oscillates wildly – in fact, it has fallen 20 per cent within a single week not once but twice over the last six months.
While speculation regarding the future of BTC continues, one thing is certain – something will have to change drastically in order to pull it out of the abyss that it is currently careening into. Until then, it’s best avoided.