Bitcoin Price Declines to $9,200; Factors For Another Strong Rally?
After surging to $11,441, establishing a new all-time high for the third time this week, the bitcoin price has declined to $9,200.
On November 29, CCN reported that the price of bitcoin surged from around $10,000 to $10,884, recording an $800 daily increase in value. Since then, in a matter of hours, the price of bitcoin quickly surged from $10,884 to $11,441, as the demand from the global bitcoin market skyrocketed.
But, the entire cryptocurrency market has experienced a major correction, as the market valuation and price of leading cryptocurrencies such as bitcoin, Ethereum, and Bitcoin Cash dropped.
Factors For the Next Rally
Over the past few weeks, CCN has provided extensive coverage on the factors that have led to the recent bitcoin price surge. The major factor has been the market’s optimism on the entrance of institutional investors and retail traders. Experts including billionaire investor Mike Novogratz, Coinbase CEO Brian Armstrong, and Bitfury vice chairman George Kikvadze have revealed that at least $10 billion of institutional money is expected to flow into the bitcoin market in the upcoming weeks.
Some analysts have claimed that Thanksgiving and the holiday weekend after it led to an increase interest and demand for bitcoin and the cryptocurrency market, as families gathered and discussed the most important developments and technologies, including bitcoin. Essentially, bitcoin was a “hot Thanksgiving discussion point,” and as such, more individual investors and casual traders were exposed to the cryptocurrency market.
While the bitcoin price has dropped below the $10,000 mark, analysts such as BTCC CEO Bobby Lee and Novogratz stated that bitcoin will likely surpass $40,000 in 2018 with ease. The recent correction of bitcoin price will allow the market to stabilize and prepare for another rally.
Major factors for bitcoin’s expected rallies in the mid-term and throughout 2018 are the sudden flow of large capital into the bitcoin market. As tens of billions of dollars flow into bitcoin, the cryptocurrency will become even more liquid, as the average daily trading volume of bitcoin enter the $10 billion region.
Bitcoin’s daily trading volume had surpassed $10 billion in the past, but is currently stable at around $8.6 billion. It is likely that with large-scale hedge funds and investment firms, the daily trading volume of bitcoin will surge, allowing the cryptocurrency to become more liquid and adopted by the mainstream.
“My new price target for bitcoin is USD $48,000. Will it take approximately 7 months to reach that? ” said Lee.
Financial Institutions Enter Bitcoin Market
Square, the most widely utilized financial app in the US finance market, has officially integrated bitcoin, enabling its millions of users to purchase, sell, and store bitcoin on the Square application.
Almost immediately after its integration of bitcoin, the market valuation of Square increased by more than $1 billion, from $15 billion to $16.1 billion.
It has become significantly more difficult for financial service providers in the traditional finance sector to dismiss bitcoin, as integrating the cryptocurrency allows companies to penetrate the $336 billion cryptocurrency market. As existing financial service providers move to implement bitcoin, the market valuation of the cryptocurrency will rise, contributing to its next rally.