Bitcoin (BTC) dips below $19,000 in broader decline. Should you buy?
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Bitcoin leads the broader cryptocurrency market down 4.5%, pushing the entire sector below the $1 trillion market cap mark.
Important points
- Bitcoin (BTC) has fallen more than 6% today, trading as low as $18,644 at press time, according to CoinMarketCap.
- The most valuable cryptocurrency on earth hasn’t been this low since June.
- Media reports suggest that holders of large amounts of BTC have moved a significant number of Bitcoins – as many as 15,000 coins – to crypto exchanges signifying a possible sale of the digital asset.
On Wednesday, the top crypto asset – Bitcoin (BTC) – was priced as low as $18,644 per coin across cryptocurrency exchanges, representing a decline of more than 6% over the past 24 hours, according to CoinMarketCap.com. The entire cryptocurrency sector has experienced a severe downturn dubbed the “crypto winter”, as asset prices, trading volumes and digital portfolio values have fallen rapidly and far throughout most of 2022.
Over the past 24 hours, however, the fall in Bitcoin’s price has dragged down the entire asset class by almost 5%, bringing the total market cap of the category below the psychological threshold of $1 trillion down to $949.20 billion. Ironically, during the peak of the crypto market last November, Bitcoin itself had passed a value of $1 trillion.
Bitcoin whales seem to be selling large amounts of BTC
Bitcoin’s recent price drop may have been caused by a significant influx of BTC from the digital wallets of investors with large amounts of the digital asset – known as Bitcoin whales – into crypto exchanges. According to media reports, the CEO of crypto analysis website Cryptoquant noticed that as many as 15,000 Bitcoins have recently moved from private wallets to public trading platforms.
This increase suggests that Bitcoin whales, who bought at much lower prices, may be looking to sell and take profits in the current price range. If that happens, that amount of volume will push the price of Bitcoin even lower. So it is very likely that the price movement in the last day could be the result of an early exodus of BTC holders who do not want to wait to see what happens.
Is Bitcoin a purchase?
But for anyone not currently invested in Bitcoin, the best short-term course of action is to wait and see what happens to see if the price drops even lower. Bitcoin is already priced at 72% from its all-time high of $68,789 per coin (set for November 10, 2021). According to the Bitcoin Rainbow Chart posted on BlockchainCenter, BTC is currently priced at historically low “fire sale” levels right now.
Every investor needs to understand their own risk tolerance, how much they are willing to lose, and any assets they plan to place a financial stake in. Bitcoin has been a proven crypto performer, delivering triple-digit returns on an annualized basis for the past decade. While it makes sense to take a wait-and-see approach during the current downturn, crypto-curious investors should know that prices for premium digital assets like Bitcoin won’t stay this low forever.
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