The price of Bitcoin fell to its lowest in more than four months today, losing value as it suffered from technical selling.
The world’s largest digital currency by market value declined to as little as $6,081.09 on the CoinDesk Bitcoin Price Index (BPI).
At this level, Bitcoin was at its least since February 6, and it was down more than 9% in the last 24 hours, additional BPI figures show.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
The digital currency suffered this sharp decline after spending much of the last week trading with relatively tight ranges between $6,300 and $6,800.
On Wednesday, Bitcoin suffered a modest decline after markets responded to news that South Korean exchange Bithumb had been hacked, falling 2.6% during the day.
However, the cryptocurrency bounced back, recovering all the losses it had suffered earlier.
After mounting this recovery, Bitcoin traded within a reasonably tight range, before suffering a sharp drop today.
Bitcoin’s Bearish Prospects
Going forward, Bitcoin could test additional lows, said analysts.
“Ever since BTC broke the key technical level of $7250 two weeks ago, volume has clearly favored the bears with much higher volume on down days than up days. As long as the 2018 lows have held, it looks like most traders and investors are hodling,” said Jon Pearlstone, publisher of the newsletter Cryptopatterns.
“Today’s move down with higher volume (again) could change that. The drop from early june has created a bear flag pattern with a target in the $5000 range and a breakdown level at $6100 which is now being tested.”
If Bitcoin falls below its 2018 lows, it could trigger sharp trading volume and a move toward $5,000, he added.
Jeff Koyen, CEO of 360 Blockchain USA, also provided a bearish point of view.
“I expect we’ll see more sell-offs like today’s plunge to $6,100,” he stated.
“We may even see BTC down to $5K before the bargain hunters swoop back in. I also wouldn’t be surprised if we hover around $5K or $6K and sit through an accumulation phase for the next couple of weeks.”
He noted that since summer has finally started, many investors are simply putting their portfolios “on autopilot.”
Bitcoin’s Elevated Price Level
Mati Greenspan, senior market analyst for social trading platform eToro, also weighed in on the situation.
Bitcoin is “currently testing critical support at the lows of February 6th,” he stated.
“However, even if we go as low as 5k, it’ll still be a 100% increase over the last year.