Bitcoin prices have been trading south of $9,000 for much of today, fighting to recover after declining to their lowest since late October earlier today.
The world’s most prominent digital currency fell to as little as $8,666.39 around 10 a.m. EDT, having lost nearly 6% of its value in less than 24 hours, CoinDesk data shows.
At this point, the cryptocurrency was trading at its lowest since October 25, additional CoinDesk figures reveal.
Following this decline, bitcoin has experienced only modest gains, rising from its intra-day low to nearly $8,900 around 5 p.m. EDT.[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.]
After struggling in this manner, the digital currency could suffer additional losses, noted Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital.
“Bitcoin was overbought after the late October surge,” he stated, which coincided with statements by China’s president that it was imperative to “seize the opportunity” presented by blockchain technology.
Following this sharp rally, bitcoin “consolidated for a bit before breaking downward,” said DiPasquale.
When explaining why the digital currency might face further downside, the hedge fund manager cited technical analysis.
“Presently, the 50-day moving average is acting as support around the $8,600 level,” he emphasized.
“While we expect the price to respect this level, a re-test of the $8,000 range cannot be ruled out” at this time.”
DiPasquale described the sharp price gains that bitcoin enjoyed in late October as “unsustainable,” noting that they “resulted in major profit-taking.”
John Todaro, director of digital currency research for TradeBlock, offered a similar point of view.
“Bitcoin, and the digital currency market in general, posted a strong rally following the Chinese President’s comments in October, and you are starting to see prices come back some as investors tease out the actual implications of his comments,” he stated.
“It is still unclear to the extent, if any, China will actually embrace digital currencies and non-sovereign assets such as bitcoin or if the country is simply embracing private blockchains.”
Going forward, he emphasized that bitcoin’s lackluster trading activity makes it vulnerable to notable price fluctuations.
“Bitcoin has seen renewed volatility over the past 10 days and could easily push past support/resistance levels during times with thinly traded markets.”