Bitcoin, ether, and other major cryptocurrencies experienced a volatile 24-hour period, with bitcoin in particular swinging between highs and lows before settling above $29,000. Despite the fluctuations, the largest cryptocurrency by market capitalization was still up over 2.4% from the previous day, although it was well off its Wednesday morning peak of $30,000.
At one point, BTC fell as low as $27,264, which prompted some investors to consider the impact of $310 million worth of losses from liquidations of both long and short positions over the one-day period. The sudden drop was likely due to a combination of factors, including rumors that the U.S. government was selling a significant amount of bitcoin, and that coins from the long-disgraced crypto exchange Mt. Gox would be sold on the market.
Markus Levin, co-founder of blockchain-based geospatial oracle network XYO Network, noted the potential impact of these rumors but also pointed out that the market rebounded quickly. He expressed optimism about bitcoin's long-term resilience, stating that the recent dip was merely a blip in the cryptocurrency's upward trajectory.
Levin wrote, "It seems like these were primarily just rumors, however, what is interesting to see from all this is how much of the selling that was triggered by this event was ultimately absorbed by the market. The market is rather jittery right now, yes, but Bitcoin is looking stronger and stronger from the lows late last year.”
Other major cryptocurrencies also experienced significant swings in value over the 24-hour period. Ether, the second-largest cryptocurrency by market value, dipped below $1,800 at one point on Wednesday, but was recently trading at about $1,910, up 2.4% over the previous 24 hours and not far off where it started Wednesday. Meanwhile, other major cryptos also seesawed but were recently in the green.
The CoinDesk Market Index, a measure of crypto markets performance, was recently up about 1.9%, indicating that overall, the cryptocurrency market was performing well despite the volatility. In Asian markets, the Hang Seng and Nikkei were up slightly on Thursday morning, while in the U.S., the Nasdaq closed up 0.4% but the S&P 500 fell 0.3%.
Despite the fluctuations, many cryptocurrency experts remain optimistic about the future of bitcoin and other major cryptocurrencies. The recent volatility is merely a reflection of the inherent risk involved in investing in such a rapidly-evolving and often-unpredictable market. However, for those willing to take the risk, the potential rewards can be significant.
As more and more businesses and individuals embrace cryptocurrencies as a legitimate form of payment and investment, the market is expected to continue to grow and evolve. While there will undoubtedly be bumps along the way, the long-term outlook for bitcoin and other major cryptocurrencies remains positive.
