The largest digital token reaches nearly US $14,000 before receding. Its volatility is near the highest levels since the crypto bubble in 2018.
It was reported that Bitcoin’s rise on Wednesday, June 26th, was meteoric but its fall was just as fast. This is an example of how easy it is to enter and exit the world of cryptocurrencies, where the Bitcoin fever increased its price to almost US $14,000, its highest level since January 2018.
It should be noted that the largest digital asset subsequently changed course in a matter of minutes after a major cryptocurrency market reported an interruption to service. The withdrawal was said to accelerate on Thursday and returned the currency’s price to almost the same level as the previous day.
The rise in prices reminded of the cryptographic bubble that exploded at the end of 2017, when Bitcoin and other cryptocurrencies, beset by regulatory setbacks and fraud-related problems, fell out of favor. It is worth mentioning that the price of Bitcoin dropped to around US $3,600 six months ago.
Abrupt Fall
After having reached a record maximum, Bitcoin fell by US $1,800 in only 10 minutes. This year, cryptocurrency bulls were encouraged after many Wall Street heavyweights seemed to be more interested in and more readily accepting of cryptocurrencies and the underlying Blockchain technology, which helped boost prices.
The trend of prices turned parabolic in early June, 2019, when Facebook Inc. disclosed plans to introduce its own digital currency. Many proponents cited the measure as a long-awaited validation of the potential of digital assets to alter the global financial system drastically.
However, the reversal on Thursday, June 27th, caused one of the biggest Bitcoin proponents, Mike Novogratz, to regret not having taken more money off the table before the currency lost most of its profits. John Spallanzani, Portfolio Manager at Miller Value Partners, considers that that could have contributed to its rapid decline.
Bitcoin fell by 19% on Thursday, which reduced the loss to 16% by the end of the day. It advanced 4.2% to US $11,137 at 10:50 a.m. in Hong Kong on Friday, June 28th. Bitcoin’s volatility is close to the highest levels since early 2018, when the bubble burst.
Mati Greenspan, Senior Market Analyst at the eToro trading platform, believes that the cryptocurrency market “got too hot on Thursday and now it is getting cold.” He considers that the market is incredible, as the price can fall by around 15% in less than an hour and return to the highs of the previous trading day.
Besides Bitcoin other alternative currencies also dropped on Thursday, among which Ether and Litecoin had a decrease of 14%. For its part, the Bloomberg Galaxy Crypto Index (BGCI), which tracks a basket of the largest digital assets, also fell by 19%.
Bitcoin has proved to be a solid crypto asset that can recover from extreme situations, such as the one occurred on June 26th. Only one day after that, it was able to return close to its maximum value. Network users can feel confident to invest in this leading cryptocurrency if they want to make good profits.
By Willmen Blanco
