Bitcoin News: On Friday, Bitcoin prices soared to a new all-time high of almost $42,000, only to plunge all the way down to about $31,000 on Monday morning. That’s a decline of more than 20%—which means that bitcoin is in a bear market now, as bizarre as it sounds. Over the past few months, Bitcoin is still up a lot, not to mention from where it was trading just a few weeks ago. But the drop shows how, for some on Wall Street, the spectacular rise has raised alarm bells.
When the price of bitcoin just goes straight up, it’s frightening, “It’s scary when the price of bitcoin just goes straight up,” “This pullback was needed.”
A analyst at Bank of America just last week said that the rise of bitcoin may be the “mother of all bubbles,” adding that the latest surge is greater than other infamous manias of the last few decades: gold in the 1970s, dot-coms/tech in the late 1990s, and housing in the mid-2000s. So, according to Naeem Aslam, chief market analyst at AvaTrade, the drop of the past few days is a “healthy correction” that “was due a long time ago,”
In mid-December, Bitcoin first surpassed the $20,000 level and soared above $30,000 earlier this month — a huge rebound from a low of just over $4,000 as last spring’s Covid-19 outbreak sent global financial assets plummeting.
Bitcoin News: Bitcoin is already up more than 10 percent in 2021, even with the fall over the weekend and Monday — and it has risen by around 300 percent in the past 12 months.
Aslam said in a study that before bottoming out, bitcoin could fall to the $28,000 to $30,000 range.
“This is not the time to panic but to look at this opportunity from a more optimistic lens,” Aslam said, “as the bull run is not over yet, and it is still likely to make its journey to the upside.”
Many bitcoin bulls remain bullish about the future of cryptocurrencies, citing the fact that consumers can buy and sell digital payment giants Square (SQ) and PayPal (PYPL), and many top institutional investors are investing in it, including Paul Tudor Jones, Stanley Druckenmiller and Anthony Scaramucci.
Recently, a top executive at BlackRock (BLK), the largest asset manager in the world, said bitcoin could replace gold as the primary asset that investors would use to protect against inflation and a weaker dollar.