It isn’t too clear what triggered the sell-off. Some have looked to comments from both the Federal Reserve chairman, Jerome Powell; and U.S. President Donald Trump.
Bitcoin hasn’t had the best week. After rallying past $13,000 for the first time in over a year, the cryptocurrency stumbled. Hard. After flirting with the $13,000 price point for all of some six hours, Bitcoin fell, tanking by $2,000 in the following day. In fact, as of the time of writing this, BTC sits at $11,800, basically flat on the day, but wayyyy down on the week.
Speaking to a group of regulators, Powell did give Bitcoin the classification of a gold-like store of value, but he went on to worry the United States about the potential implications of a system in which the systems of Libra or other cryptocurrencies were in control of the economy or certain parts of society.
And Trump just flat out bashed Bitcoin and its ilk, accusing cryptocurrencies of being backed by nothing but “thin air” and facilitating potentially criminal behavior.
Others have claimed that the collapse was catalyzed by a simple case of buyers failing step in, resulting in a rapid depreciation of Bitcoin as swing investors looked to secure profits.
Anyhow, there are reasons to suggest that the dump may soon end. As spotted by a Reddit user on the official Bitcoin subreddit, a majority of the top 10% of Bitcoin investors (by account size) on Coinbase were buying BTC, presumably while the bottom 90% were selling. In fact, on July 11th, 77% increased their net Bitcoin position and 23% decreased.
It is unclear whether or not the data set includes users of Coinbase Pro or only Coinbase.com.
Why It’s OK to be Optimistic
So, why are Coinbase’s resident whales seemingly scooping up BTC as fast as possible?
Well, Fundstrat’s Tom Lee seemingly has a bit of a theory. As he explained in a recent tweet, which can be found below, the cryptocurrency is still decidedly in a bull market, as made apparent by the fact that the nearly-$2,000 dump is effectively “invisible on the weekly time frame”.
From a longer-term technical standpoint, bulls are still in control, giving the asset the potential to reverse into new year-to-date highs in the coming weeks and months.
Indeed, there are many models currently pointing towards the fact that BTC will finish the year on a high note. Per previous reports from Ethereum World News previously, analyst CryptoThies recently laid out the fact that should history repeat, Bitcoin could surge by over 100% in the last quarter of 2019, implying an end-of-year price of $20,000.