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Well, don’t we all feel foolish? After touting bitcoin’s strength and saying that it’s working its rear off to stay above $8,000, bitcoin has undergone a serious drop that saw it lose roughly $600 in 24 hours. At press time, the granddaddy of all digital assets is trading in the $7,900 range.
Bitcoin Is Suddenly in the Red
The good news is that bitcoin had ultimately fallen to $7,700, which means that it’s currently trading for $200 more. Perhaps the bulls just need a break before they attempt to break $9,000 again.
Still, it’s a little disappointing to see some solid gains and progress suddenly disappear. Mind you, it’s only $600 – not $6,000, like what we saw in 2018, but it still gets under our skin.
One source is attributing this behavior to a sudden sell-off. Here’s a legit question for everyone who sold their bitcoin stashes last night: “What the heck are you doing?” With bitcoin’s recent behavior, more spikes were likely, which means that you could have potentially added more to your worth and earnings before selling everything off completely.
Selloffs like these are proof that many investors simply aren’t thinking big enough. While hodling under all circumstances is one extreme, it’s not always smart to cash out so early in the game. Investors need to think long-term into the future if they’re going to rake in any considerable earnings.
One Reddit user explains:
About 20-30 minutes before the dump, a whale moved 25K BTC (worth $215 million) to Coinbase. About an hour after the dump, a whale moved $14K BTC (worth $112 million) from Coinbase to another wallet.
Another user puts it best in a separate post:
If you do a little math and follow the timeline, it’s not hard to see that someone dumped 25,000 bitcoins for $215 million and bought it back shortly after for $200 million. In doing so, they pocketed $15 million and walked away with the same amount of bitcoin as they started with.
This mentality doesn’t make sense. The whole point of investing is to assume gains and add to your overall net worth. Why utilize a strategy that’s going to place you right back where you started?
How Long Will This Last?
Despite the drop, many analysts and industry leaders aren’t terribly worried about what will happen next. Timothy Tam – chief executive and co-founder of cryptocurrency research firm Coin Fi in Hong Kong – claims that this is just “normal bitcoin volatility,” and that the drop isn’t likely to last long. He comments:
It just got a little bit extended. This is a healthy retracement. There’s quite a lot of volume going through. This is normal bitcoin volatility. At the end of the day, it still doesn’t take a lot of money to move these markets compared with traditional markets.