The digital currency dipped well under the US$6,000 threshold on Sunday (June 24) but by Monday (June 25) bitcoin had made a slight recovery to rebound above US$6,000 yet again.
Bitcoin officially dipped to its lowest levels thus far in 2018, marking a near 70 percent decline since its near US$20,000 highs in December 2017.
The digital currency dipped below the US$6,000 threshold on Sunday (June 24) to $5,826.41, according to data from Coinmarketcap, slipping past its previous 2018 lows of US$6,202.21 set on February 5.
While bitcoin’s decline back into the US$5,000 may seem grim when compared to its peak late last year, data shows that the digital currency first reach a high of US$5,707.79 in September 2017. In other words, the cryptocurrency is still up two percent since then despite its 2018 struggles.
In a previous interview with the Investing News Network (INN), David Drake, founder and chairman of LDJ Capital, said over-the-counter trading desks have been on the rise, which is one reason why bitcoin’s price has struggled so much this year.
“One of them can easily manipulate the [bitcoin] price and push it down,” Drake told INN, explaining that there are now over 100 OTC desks when there used to be only six major desks.
Drake told INN that market manipulation has also largely contributed to bitcoin’s decline since its 2017 highs which, research shows, also contributed to to its soaring price last year. CNBC reported earlier in June that roughly 50 percent of bitcoin’s price increase last year was a result of coordinated price manipulation by using a separate cryptocurrency called tether.
A finance professor at the University of Texas, John Griffin, told CNBC that tether. was creating price support for bitcoin, which as result had “huge price effects.”
“Our research would indicate that there are sophisticated people harnessing investor interest for their benefit,” he told the publication at the time.
According to Drake, OTC insider trading has also been a significant impact, adding that hopefully the OTC will start looking into it either by the end of 2018 or by early next year.
Other contributing factors to bitcoin’s most recent drop include the Japanese government indicating it will evaluate cryptocurrency users in order to prevent using digital assets being used illegally.
Yizumi Nobuhiko, chairman of Japan Credit Information Service, was quoted saying according to NHK:
“By providing the personal information of suspicious individuals including credit scores and financial data, the government hopes to protect investors and improve the security of the cryptocurrency industry.”
What’s more, Bloomberg reported Japan’s financial services agency demanded that six of Japan’s largest cryptocurrency trading venues to “improve measures to prevent money laundering,” and are to submit their plans by July 23.
In terms of where bitcoin’s price is headed, Drake said that he doesn’t expect the price to reach near the US$25,000 level, but says it could end back up in the US$12,000-US$15,000 levels at some point again.
“Prices go up and down 20-40 percent sometimes every week for the last 12 months, and that will not stop,” he said.
As of 7:14 p.m. EST on Monday (June 25), bitcoin bumped back up to US6,253.71, representing a 1.42 percent increase over a 24-hour period.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.