Bitcoin saw an intense downwards movement yesterday that led the benchmark cryptocurrency to erase the gains that came about as a result of its latest push towards the coveted five-figure price region.
The crypto’s drop led it to erase nearly $2,000 from yesterday’s highs.
It has been able to recover a small portion of these losses, although the crypto still appears to be in a precarious position.
This selloff led to a resurgence of Bitcoin critics who had been quieted by the cryptocurrency’s recent rally.
Some are now noting that this latest movement elucidates that Bitcoin is a “scam” and that it is rife with manipulation, but they are missing an integral piece of data that is key to understanding the cryptocurrency’s mid-term performance.
At the time of writing, Bitcoin is trading down nearly 13% at its current price of $8,500, marking a notable decline from daily highs of nearly $10,000 that were set yesterday.
The crypto had been attempting to break into the five-figure price region on multiple occasions throughout the past several days.
Although BTC was unable to gain a foothold within this region, it never faced any type of swift rejection at this level prior to yesterday afternoon.
This gave the crypto’s uptrend an illusion of immense stability, but the rug pull overnight that led Bitcoin to lows of $8,100 has invalidated this notion and appears to have opened the gates for it to see further near-term downside.
Critics Revel in BTC’s Decline
Bitcoin has its fair share of critics, and two of the most outspoken ones have taken its latest decline as an opportunity to heap hate onto the benchmark digital asset.
Economist Nouriel Roubini stated that the 15% decline seen yesterday proves that Bitcoin is a “total scam.”
“Bitcoin crashes by 15% in 7 minutes on NO news: a rigged, totally manipulated, whales-controlled market where most transactions (90%) volumes are false as exchanges pretend to have liquidity they don’t have. Massive pump & dump, spoofing, front running, wash trading! Total Scam!”
Bitcoin crashes by 15% in 7 minutes on NO news: a rigged, totally manipulated, whales-controlled market where most transactions (90%) volumes are false as exchanges pretend to have liquidity they don't have. Massive pump & dump, spoofing, front running, wash trading! Total Scam!
— Nouriel Roubini (@Nouriel)
Gold bug and outspoken BTC critic Peter Schiff also echoed this sentiment, explaining that the crypto’s decline is the result of investors pulling funds out as the halving event’s hype fades.
“Looks like some of the Bitcoin speculators who bought in anticipation of the halving couldn’t wait for the actual fact to start selling. As more sellers jump the gun, by the time the fact occurs, the profits those buying the rumor were hoping to cash in on may already be gone.”
Looks like some of the speculators who bought in anticipation of the halving couldn't wait for the actual fact to start selling. As more sellers jump the gun, by the time the fact occurs, the profits those buying the rumor were hoping to cash in on may already be gone.
— Peter Schiff (@PeterSchiff)
Both of these individuals are ignoring the elephant in the room, however.
Despite BTC’s sharp overnight decline, the cryptocurrency is still one of the best performing assets in 2020, with a 7% lead over gold and a nearly 30% lead over the S&P 500.
Image Courtesy of Skew
As its technical and fundamental strength over a mid-term period continues growing, it is likely that this trend will persist throughout the year ahead.
Cole is a cryptocurrency analyst based in Los Angeles. He studied at the University of California Irvine and has been interested in Bitcoin and the crypto markets since 2013.
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