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Bitcoin prices plummeted Thanksgiving Thursday, with the # 1 cryptocurrency retreating sharply just as it was on the verge of reaching its first all-time high in about three years.
Bitcoin BTCUSD,
BTCUSD,
on CoinDesk they were changing hands at $ 17,207, down 11% on Thursday, but plunged to an intraday nadir within $ 16,327.88. This means that the asset has lost more than 15% from peak to low in the past 24 hours.
The downward slide for the leading cryptocurrency comes as it flirted with its first record high since that of $ 19,783.21 recorded in December 2017, according to Dow Jones Market Data.
To be sure, bitcoin has been an inherently volatile asset since its inception in 2009 and some specialists have not been impressed by the current drawdown.
“Don’t worry, this is a healthy correction,” Naeem Aslam, AvaTrade’s chief market analyst, wrote in a research note on Thursday. An asset is generally viewed as correcting when it falls by at least 10% from its most recent peak.
“Technical indicators have long indicated that a correction is on the way and now the price is moving back towards its 50-day SMA. [simple moving average] on the daily time slot. The pace of the current sell-off is good news for Bitcoin as it has pushed the RSI [relative strength indicator] in the oversold zone within 4 hours that hadn’t happened since September, “wrote analysts, referring to momentum and price strength measures in an asset.
David Madden, market analyst at CMC Markets UK, attributed the retracement in bitcoin to so-called profit taking, with investors selling after a sizable gain this year in the world’s # 1 cryptocurrency.
Indeed, bitcoins have risen nearly 140% so far in 2020, while the Dow Jones Industrial Average DJIA,
grew 5% this year, the S&P 500 SPX Index,
gained over 12% during the same period and the Nasdaq Composite Index COMP,
has grown by 35% in the year to date. Gold GOLD,
meanwhile, it has risen 19% so far this year and is planning a reversal of much of its rally with the emergence of viable COVID-19 vaccines.
Check-out: Bitcoin could hit $ 500,000, says ARK Invest founder and CEO
Yves Lamoureux, president of Montreal-based macroeconomic research firm Lamoureux & Co., told MarketWatch earlier this month that bitcoin was due to a withdrawal and that a sizable drop for the cryptocurrency could be cathartic, opening the door. way to a new upward movement.
At the time he said a pullback was possible for bitcoin prices at around $ 13,000 or $ 13,500.
To read: 6 reasons bitcoin is trading at its highest level since 2017 and 1 caveat
However, bitcoin has experienced a huge uptrend overall.
The new rush has come as cryptocurrencies are lifted from growing mainstream interest as central banks weigh the issue of digital currencies and payment platforms move to include them.
Additionally, major investors, including hedge fund luminary Paul Tudor Jones, have become proponents of the asset, describing its recent rally in a CNBC interview as its “first inning.”
Critics of the virtual currency say its primary utility is in criminal acts, such as money laundering, and others warn that its value could drop to zero at any time.
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