After facing a sharp decline on the week, bitcoin’s price recently increased from $6,190 to $6,400 in seconds. Previously, the coin’s price had dropped 0.7% in 24 hours to trade as low as $6,354. As such, the sudden increase was not expected by many in the crypto industry.
The total crypto market capitalization tumbled from $239 billion to $200 billion on September 6. One of the probable triggers of the drop was the announcement by Goldman Sachs that they had dumped plans to launch a cryptocurrency trading desk. This caused prices of digital currencies such as bitcoin to lose significant gains from the previous brief bulls.
However, today the coin’s price gained 4% and increased from $6,190 to $6,400 in seconds. This move and many others prior, by bitcoin’s price have proven the market’s volatility. Accordingly, CNBC Crypto Trader, Voorhees stated that he does not expect the bears to end anytime soon, although the market is not going to collapse. As such, the market may eventually come out of this volatility after a few collapses in the near future.
Some reasons that can explain the current volatile market is the fact that cryptocurrencies are an asset class that is still in its infancy stage. As such, there are not enough institutional products and publicly traded instruments, which leaves the market vulnerable to extreme daily volatility and manipulation. The leading cryptocurrency has shown high volatility in the last few months in the $6,000 to $10,000 range.
With this in mind, there are few outcomes that we should expect from bitcoin’s price. First, bitcoin’s price may retest its previous annual low at $5,600. The current support level is key to the coin’s uptrend or downtrend, if this level is broken, the price may go as $5,800. However, if it manages to break above this support, it may move as high as $10,000.
Do you think bitcoin’s price will manage to move above the current support level?
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