TMCnet Feature
January 26, 2021

Will The Bitcoin Prices Crash After the Great Surge? Here's What We Know About It



The year 2021 has so far been a blessing for the crypto owners, especially the bitcoin holders. Bitcoin recently surged to a price of $40,000 per coin, increasing twice in value in the last 30 days and causing the total market value of all cryptocurrencies to cross the $1 trillion mark.



According to CoinDesk, world’s leading news platform for bitcoins and other digital currencies, Bitcoin soared past $38,000 last week on Thursday, confirming that this caused the total value of the whole crypto market to go beyond $1 trillion, making this the first such instance.

This huge increase in crypto trade volume might have steered a rally over the last few months. But is there a possibility that the bitcoin values might crash? According to some cryptocurrency market analysts and strategists, there is a great chance that this might happen.

The bitcoin’s price is infamously unstable, and significant unanticipated price fluctuations are no surprise. We have collected a range of comments and opinions from renowned market analysts on how a price crash may look, and what could possibly cause it.

  • Bitcoin has always shown and continues to show a high fluctuation says Joe Di Pasquale, Chief Executive Officer at BitBull Capital, a hedge fund for cryptocurrencies. He observed that after prices had risen to an all-time high, they fell almost $7,000. He believes that the major cause behind this fall is people using loads of leverage, therefore easily getting washed out.

  • Ever since the year 2013, not a year has passed by without witnessing a fall of at least 25% in the prices of bitcoin from a maximum price point.” says Gavin Smith, Chief Executive Officer at Panxora, a digital currency management firm. A rise in the bitcoin prices of up to $80,000 would not surprise him, neither would a setback of even 40%. In other words, he’s bullish: “Over a three-year period, this is a great asset.” However, in the longer run, technological developments pose a risk to bitcoin, since they could possibly surpass them. He believes that there are very slight chances, however, it would always prove to be costly and dangerous to completely disregard the risk.

  • Bitcoin values may rally twice or even thrice from the present level before shrinking back to the current prices, believes Mike Venuto, a manager at the exchange traded fund, which invests in blockchain related stocks. This indicates a retracement of more than two-thirds from the hypothetically assumed new all-time high. He believes that the overzealousness may prove to be the reason behind the imminent crash in prices.

  • Denis Vinokourov, head of research for a cryptocurrency broker claims that the swings will occur in the prices, and indicates that these fluctuations will be quite significant. He thinks that the prices will certainly move upwards in the longer run, which may be influenced by the bullish hopes of large Wall Street firms.

  •  “The history of financial markets is the history of bubbles," says a finance professor, James Angel, from the Georgetown University. He observes that the authorities might press upon the bitcoin surge if they become increasingly threatened by it. He proves his point by pointing out the instances in the past where almost everyone who attempted to introduce their own money against a national currency was put away by the regulators.

  • "Although we are witnessing a clear expression in the market's bullish sentiment right now, a correction could well be on the cards," says Sui Chung, Chief Executive Officer at a cryptocurrency provider firm called CF Benchmarks. He believes that this is a normal portion of a market mechanism. Although it might reduce near-term interest, it will guarantee that the price rises in the future remain grounded.

  • “Profits cuts might occur along the triggering momentary dips”, believe the strategists and analysts at the immediate bitcoin trading app. They also claim that due to the huge volumes of adoption by institutions, it would come as a surprise if the price of bitcoin fell under $20,000 soon.

Conclusion

So, according to our insight, the recent surge in bitcoins prices might be followed by a crash in its prices, but that’s classic bitcoin, and if we see price trends similar to the past, the price values will perhaps recover. When though, is the real question.

 
 
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