The year 2018 started as a promising year for Bitcoin and most of the altcoins in the top 20 according to market cap. In January, the world’s premier crypto asset was worth more than $19,000 and approaching towards the $20,000 threshold after a multi-week surge that started at the end of 2017 and peaked in late December. After January 14th, the market started to correct itself, but the downturn that came after that was surprising, to say the least.
Bitcoin (BTC) price continued to drop all year long, with short spurts of stability. For most of October and November, it hovered between $6,000 and $7,000, but another astonishing collapse took over the industry on Wednesday, November 14th.
Starting from that day, BTC fell over and over again: first, it dropped below $6,000, then it fell from $5,000, and when we thought further cuts were impossible, its value was less than $4,000. For days, it shed at least 5 percent of its price, often more than that. Today, the battered asset is exchanging hands at $3,782.08, which would represent a -4.78 percent balance on the day.
14-Month Lows are Hard to Come back from
The digital asset has hit 14-month lows in its recent skid and has left investors, institutions, and the whole community wondering whether this is rock bottom or if there is further room to go down. The most important takeaway is that Bitcoin is on track for its largest yearly loss to date.
If we take into account the fact that three weeks ago BTC was trading at $6,300, we are talking about a 54 percent year-to-date drop, according to data found in the CoinDesk’s Bitcoin Price Index (BPI). In October, BTC dropped to as low as $6,000, but even back then, most of the actors within the industry thought that it would regain some steam in the last few weeks of the year.
Then, November happened. And for weeks, there was the talk of a bullish market, but the bears are still dominating the scene, making a year-end recovery to previous levels unlikely, at least in the short term.
At the end of the day, the current projection has Bitcoin ending the year with a 73 percent annual price fall, which would be the biggest ever recorded in its brief history. The asset has been around since 2009, and never had to endure such a harsh yearly drop. Prior to 2018, BTC had a streak of three years gaining value.
Only One other Annual Loss to Date
In fact, the cryptocurrency only experienced one other annual loss, and it was a 57 percent drop back in 2014 when there was not as much media exposure as there is today. If the prices hold below $5,959, we would be talking as the single biggest annual loss in the history of Bitcoin, and right now, when it is below $4,000, the outlook looks bleak.
However, as it happened last year, Bitcoin also has shown its power by gaining value quickly, so we should not rush to conclusions just yet. But technical charts are not providing much hope for the near future, according to Coindesk.
Coindesk reports that the symmetrical triangle breakdown seen in the last four-hour chart is swinging towards a test of the November 25th low of $3,474, and that acceptance below that level would mark a bear grip and open up the further potential to drop.
By Andres Chavez
