Bitcoin drops back down under $11,000
Bitcoin's price is flailing, but that doesn't necessarily mean it's the end of BTC.
OPINION: Bitcoin is back under US$11,000, its lowest level since 17 January when it dipped beneath US$10,000. This may be a sign of concern for traders who might have expected bitcoin to be on a strong rebound by now. Traders may have expected that today's successful Lightning Network test would buoy their spirits, but that isn't reflected in the price, as quoted on CoinMarketCap.
Traders might also be able to take comfort in the fact that the recent dip under US$10,000 was accompanied by a buying frenzy which shoved the price back over US$12,000 a couple of days later.
It looks like there's still plenty of appetite for bitcoin whenever it's perceived at cheap, and US$10,000 might be that dividing line. It's hard to forget the excitement and the subsequent price rise to almost US$20,000 which followed bitcoin's breaking of US$10,000.
It seems like the psychological barrier at US$10,000 is still holding a lot of power.
Some experts predict that bitcoin could reach as high as US$50,000 in 2018, assuming the successful release of the Lightning Network and other scaling improvements. Others are more pessimistic. Analysts at Credit Suisse, for example, have settled on US$6,000 as a "fair price" for bitcoin.
It's also worth noting that traditionally, bitcoin prices have been dominated by the same pattern of ups and downs as people buy the dip when prices are low and consolidate when the prices are high.
If history is any indication, it seems likely that prices will rebound again before long. It's still a sizable drop though, and long-term bitcoin holders might want to start looking at buying low and selling high to take advantage of the characteristic spikes and dips.
Right now, given bitcoin's trading pattern, it seems like a safe conclusion that the price will keep going up and down above the US$10,000 mark – depending on what else happens – and that any profits in bitcoin trading might come from anticipating these movements.