In the hindsight of geopolitical turmoil with US-China trade war intensifying and Hong Kong protests getting more attention, the “digital gold“, bitcoin is seeing a downward trend. At the time of writing, the world’s biggest cryptocurrency is standing around a price mark of $ 10,411 while showing a shocking 0.22% increase in the past 24 hours alone.
Despite crossing the $12,000 mark several times in the past month, bitcoin price has been unable to rally on.
See you @ $6000
— Lost in Crypto (@LostinCrypto) August 15, 2019
Almost 9% drop in one day alone has once again exposed the bitcoin’s volatility issue in front of the global financial world. Despite all the claims regarding bitcoin being more mature than before, there is a lot of room that needs to be covered for this technological innovation in terms of its price stability.
With just a few hundred dollar nudge in the downward direction has opened up the gate for a bear run. Even the claims of $6,000s have sprung up. If the asset continues on its bear run, a severe downturn might just be on the cards from here on.
Amid the geopolitical turmoil, gold has been seeing an uptick in its price as people are reverting to “safe havens” in order to save their money. But bitcoin has still not been able to garner much of the attention despite being called the “digital gold”.
It has just been over a decade since bitcoin came to the financial scene while gold has been around as a representative of value since ancient times. As of yet, there is an apparent lacking of correlation of bitcoin with gold.
The combined correlation of gold, USD and the stock market with bitcoin is also relatively insignificant. This indicates bitcoin has not been able to align itself better with the traditional markets as of yet. In addition, the erratic price volatility has been one of the reasons why the general public doesn’t trust this digital asset as a credible store of value.
From here, reviews about bitcoin are getting divided into 3 factions. The first one is of the bitcoin bulls that expect this asset to break its bearish behavior and continue on its bullish behavior that was being seen in the past few months. On the other extreme, bitcoin bears expect it to drop even further.
The pullback is expected to be around the range of $8,500-$7,500. Midway lie the moderators who believe bitcoin is going to consolidate itself further in the $9,000-$12,000 range.
Hit the Magenta line perfectly. Let see if it can bounce. If it fails to bounce then goes to $9k to 9.1k. pic.twitter.com/XiAJFh3uke
— Mihir (@MihirNaik19) August 15, 2019
Despite whether it goes up or down from here, one thing seems evident that bitcoin’s reputation as a store of value worldwide is not as great as previously thought to be. If it aligns its movements with gold, it can be assumed that people are trusting both the assets equally which will be a huge win for bitcoin.
As of yet, there is no such sign. Price volatility and manipulation construct an aura of uncertainty around bitcoin which attaches a negative connotation to it. While its staunch proponents were expecting an all-time high just a few weeks ago, all those expectations are now dwindling with the recent drop. Erratic price swings are a norm in the bitcoin world.
With skeptical opinions making rounds about it in the mainstream media, it becomes difficult for the general public and institutions to accept it. For bitcoin, there is still a huge void of technological and regulatory development that needs to be filled. Before this void is filled, it is highly unlikely that bitcoin will be as much trusted as gold on a global scale.