Bitcoin prices have been experiencing a downward trend over the last several weeks, moving steadily lower after surging 40% in one day.
The digital currency declined to as little as $8,359.85 today, its lowest in almost three weeks, CoinDesk data shows.
At this point, the cryptocurrency was down almost 20% from its recent high of more than $10,300 reached in October, additional CoinDesk figures reveal.
Going forward, bitcoin will probably suffer additional losses before it moves higher, predicted analysts.
Jacob Canfield, founder of Signal Profits, summed the situation up nicely.
“One thing is painfully clear,” he stated. “We are definitely in a downtrend.”
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, offered a similar perspective, emphasizing technical analysis to make his case.
Bitcoin “is trading below the 50-day moving average,” of $8,600, “which was acting as support throughout last week,” he noted.
“We can expect the price to find temporary relief around $8,400 and $8,200,” stated DiPasquale.
However, “a drop to $8,000 is a real possibility,” he emphasized.
The analyst noted that $8,700 is providing “immediate resistance, but Bitcoin appears unlikely to attempt it going into the weekend.”
“This continued downward trend is not surprising,” said Joshua Frank, cofounder of digital analytics platform TheTIE.io.
He described the losses that bitcoin has been experiencing lately as inevitable, claiming that the 40% climb the cryptocurrency experienced last October was “an irrational move” that was “not driven by sentiment.”
Bitcoin’s Lackluster Sentiment
Frank offered some sentiment data on the world’s most prominent digital currency, providing some figures that failed to paint a rosy picture.
“Tweet volumes on Bitcoin have declined by over 50% since this summer and we have not seen any catalyst to suggest that this trend will change,” said Frank, citing figures provided by TheTIE.io.
“We saw a slight bump in tweet volume driven by Bitcoin’s massive 40% movement, but that interest has since subsided,” he stated.
“At the same time we have seen a pretty consistent decline in long-term sentiment on BTC.”
The chart below helps depict bitcoin’s long-term sentiment compared to its 30-day average tweet volume:
Bitcoin’s Consolidation Phase
In spite of the bearish input provided by some market observers, others noted that bitcoin has been in a consolidation phase.
“There has been a longer term consolidating trend in digital currencies since the summer, as trading volumes have fallen close to the 2 year low that was seen in early 2019, despite the recent uptick in activity and price action that we saw in October,” said John Todaro, director of digital currency research for TradeBlock.
Marius Rupsys, a digital currency investor , also weighed in, noting that “If you look at yearly performance, bitcoin moved from $3,500 up to $13,800.”
“Now we are just consolidating given the move was so fast and strong. So all this price action is sideways with short term bulls and bears until we find longer term trend – either bull or bear,” stated Rupsys.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.