Bitcoin Gains $3,000 After it Dropped Over 'Double-Spend' Fears

Bitcoin's price dropped significantly yesterday but today it has rebounded back up—for now.

2 min read

Jan 22, 2021

Bitcoin gained over $3,000 this morning after a brutal drop to $28,750 yesterday. It trades at over $31,500 at press time, but is down by 5% compared to Thursday high.

Reports from yesterday attributed the sudden price drop to rumors of a “double-spend”—a term used to describe the phenomena of one digital token being spent two times—in the Bitcoin protocol.

However, the rumor was later debunked by multiple proponents over Twitter and other social media sites. “There were headlines about a "double-spend" in #bitcoin! Many took that to mean that bitcoin has a catastrophic flaw (it doesn't) or the network is not secure (it is) or that bitcoin is somehow broken (it's not),” said Bitcoin educator and podcast host Andreas Antonopoulos.

Trading data shows Bitcoin has been in a downtrend since January 19, when it traded below its 34-period moving average—a technical tool used by traders that calculates the average prices over a certain time period to determine the market trend.

Since that date, over $1.3 billion worth of BTC has been liquidated as well, data from analytics site Bybt shows. This happens when traders borrow excess capital from exchanges (a process called leverage) to put on bigger positions than their capital allows, taking on a loss (a process called “liquidation”) when prices move against their favor.

Bitcoin remains in a downtrend despite a price bump today. Image: BTC:USD via TradingView

Meanwhile, despite the price bump today, Bitcoin is not wholly out of the woods yet. The asset has found a price floor at the $30,800 level (suggesting an area of demand) but continues to remain in a downtrend for now.

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