The price of Bitcoin is displayed on a screen at the Upbit Lounge in Gangnam District, Seoul, Tuesday. Yonhap
Bitcoin, the world's leading cryptocurrency, which was nearing the $100,000 milestone, continued its downward trajectory and now shows signs of potentially dropping below the $90,000 mark.
Bitcoin was fluctuating around the $92,600 level as of Wednesday, according to the current prices on various exchanges compiled by financial information provider Yonhap Infomax.
Since reaching its peak of $99,800 on Nov. 22, Bitcoin has been on a four-day losing streak, marking an 8-percent drop from its high.
In online communities where retail investors gather, opinions are divided, with some predicting that Bitcoin prices will continue to fall, while others believe now is the best time to buy at its lowest point.
“The Bitcoin bull run is over. Thank you for all the love and support for Bitcoin up until now,” one investor wrote on the Blind app, the anonymous communication platform for workers.
On the other hand, another investor wrote, “Everyone, now is the time to buy crypto. You should invest in Bitcoin when all you see on online forums are people criticizing it. In my experience, this has always been the right move. I believe this is the lowest point.”
Experts noted that while the price surge following the U.S. presidential election has slowed, selling pressure from profit-taking outweighs the buying momentum from expectations of further price increases.
Another factor cited for the decline in Bitcoin prices is the easing of geopolitical tensions between Lebanon and Israel, along with fluctuations in U.S. Treasury yields.
“Bitcoin has been on a tear since the Election Day with very few pullbacks, but the $100,000 mark remains a formidable psychological barrier,” Mati Greenspan, founder and CEO of Quantum Economics, was quoted as saying by American business channel CNBC.
“While breaking through now would be a major bullish signal, a brief pullback may be needed to gather momentum before the next attempt.”
A representation of Bitcoin / Korea Times photo by Shim Hyun-chul
The experts highlighted that the clear downside for the cryptocurrency market, ironically, is the very optimism that such a positive development brings. The excitement from the anticipation of the Trump administration's launch has raised investor sentiment, but once that expectation fades, disappointment could spread significantly.
“The market may doubt Trump's commitment to fulfilling his promises. The market's reaction will depend on whether relevant actions are taken in a timely manner,” Hong Seong-wook, a researcher at NH Investment & Securities, said.
Meanwhile, the Upbit Investors Protection Center said in a report, issued on Wednesday, that the global cryptocurrency market will undergo significant changes under U.S. leadership next year as the country will use stablecoins as a tool to strengthen the dominance of the dollar.
The report analyzed that President-elect Donald Trump, who opposes central bank digital currencies, will attempt to strengthen the value of the U.S. dollar through the expansion of stablecoins.