It’s been an interesting week for Bitcoin. First, we saw its price go to over $19,000, and when everyone thought BTC was going to break its own all-time record, it plummeted by nearly $3,000. The BTC price drop from $19,474 to $16,514 last week marks the sharpest decline this crypto’s seen since the COVID-19-caused market crash in March.
The price has recovered over the last 24 hours but is still way below the $19,000 mark. At the moment of writing, the price of 1 BTC stands at $16,762.60. Will it go up or down from this point, and what are the reasons behind the recent fluctuations? That’s what we’re going to examine in this article.
Reasons for the BTC Price Drop
No one can say for sure what caused the recent BTC price drop. However, some big news did appear just before this week’s Bitcoin crash.
For example, on Wednesday night, when Bitcoin was still flying high above the $19,000 mark, the CEO of Coinbase Brian Armstrong expressed his concerns over rumors that the US Treasury Department is planning to track owners of self-hosted crypto wallets. It’s speculated that Armstrong’s words prompted American BTC owners to sell their assets.
Another explanation for the price drop is that the market needed a cool-off. Bitcoin has been having a bullish run over the last couple of months, and it’s completely natural for it to slow down. This, however, does not mean the BTC price will continue dropping. On the contrary, it might be a sign of an upcoming bullish trend.
Despite the Price Drop, BTC Remains Bullish
Patrick Heusser, the head of trading at Crypto Broker AG believes that Bitcoin price is going to consolidate somewhere in the $18,000 range. The world’s most popular crypto is expected to stay there for a while, before resuming its rush toward $20,000.
Does this mean we can expect Bitcoin to break its record of $19,783 by the end of 2020? According to billionaire Mike Novogratz, it’s very possible. Still, he does think Bitcoin should be looked at as a long-term investment, the price of which is going to go up over the next five years, with some fluctuations like the one that happened earlier this week.
Novogratz’s advice for everyone is to convert about 2-3% of their net worth into Bitcoin and harvest “substantial gains” by 2025. When it comes to the volatility of the cryptocurrency, he thinks we are going to witness many BTC price drops in the upcoming years. However, Novogratz is positive we’re not going to see Bitcoin going below $12,000.
Another superstar in the crypto universe, finance YouTuber Andrei Jikh, seems to share Novogratz’s opinion. He’s recently posted a video, explaining his decision to invest $100,000 into cryptocurrencies.