Following a choppy weekend of sideways trading, the cryptocurrency markets have continued their recent downwards price movement and are now approaching their recently established lows.
At the time of writing, Bitcoin (BTC) is trading down over 6% at its current price of $3,900, which is less than 10% above its 2018 low of $3,600. Today’s drop has erased most of the gains that Bitcoin incurred during the relief rally that followed the drop in late-November, where BTC rose to highs of $4,400 before drifting down to its current price levels.
After Bitcoin first fell to $3,600 on November 25th, it bounced to $4,000 briefly before drifting back down to $3,600. At this point, it rallied to highs of nearly $4,400 before falling to its current price levels. That being said, $3,600 is likely the next major support level for Bitcoin, and if this level is breached significantly lower lows will be in play.
Despite the current market conditions being demoralizing for crypto investors, it is important to remember that the current price action is not unprecedented and has been seen before on multiple occasions.
While speaking about the current state of the markets, Danny Scott, the CEO and co-founder of CoinCorner, a cryptocurrency exchange, said that this cyclical pattern of boom and busts is very common in the crypto markets.
“If we look back over bitcoin’s short 10-year history, it has experienced many price fluctuations—something that is to be expected given that the industry is still very young. There have been a number of sizeable price movements over the years which have typically gone unnoticed by anyone except those within the industry. For example, in 2013 we saw the price drop 49.88% in just 14 days, which is a bigger drop than the one we have experienced over these last two weeks.”
Altcoins Continue to Follow Bitcoin’s Lead
Bitcoin’s latest drop has led the overall altcoin markets to fall, and no major altcoins have been able to dodge the current conditions.
At the time of writing, XRP is trading down nearly 5% at its current price of $0.35. XRP is still trading about 10% above its recently established low of $0.32 and is trading significantly above its 2018 low of $0.24, which was set in early-September.
Ethereum (ETH) has also been negatively impacted by today’s drop and is currently trading down over 7% at its current price of $109. ETH is currently trading 9% above its 2018 low of just under $100.
EOS is one of today’s worst performing altcoins and is currently trading down nearly 10.2% over a 24-hour trading period at its current price of $2.63. Investors should watch for how Bitcoin responds to the $3,600 region, as this could potentially act as a long-term bottom if it continues to hold as a major support level.