Bitcoin Crashed As Proffesional Investors Cashed Out
Bitcoin surged to $20,000 in December. The reason of this rapid grow was that users purchased it hoping to make quick profits. It was a time for professional investors to sell.
Georgy Verbitsky, a managing director at eToro, told Russia Today:
Many people behind bitcoin and cryptocurrencies as a whole understand that the skyrocketing prices in the last few months are linked to a cash inflow from mass-market consumers. Even pensioners wanted to invest.”
Last month Bitcoin tested a new high at $20,000. But on Wednesday a sell-off swept the cryptocurrency market and the digital asset dropped to $10,000.
According to analyst view, the skilled investors knew that the bitcoin honeymoon couldn’t last forever. Big-time miners and investors understood that they needed to diversify, that they had to get some fiat money. For that reason the people who raised money on the ICOs had to pay wages to developers.
This week’s bitcoin collapse appeared after news came from China and South Korea that regulators are going to crack down on cryptocurrencies. However, the fall actually happened because those who bought bitcoin for $17,000 to $20,000 were disappointed about a lack of further growth and started bearish deals on the market.
“It was about pure greed. Of course, after they lost a third to a half of their investments, they pushed the ‘sell’ button. A consolidation around $12,000 and $14,000 can now be expected,” Verbitsky said, adding that prices may remain stagnant for at least six months.
He provides his view by recalling the Chinese ban on ICOs ,which happened in September. That was a bigger blow than current market’s situation, but the traders were bullish and nobody noticed the hit. At this moment bearish sentiments are prevailing, and every negative news effects on the price.