In brief
- Bitcoin's price briefly dipped below $30,000 today.
- The price of Bitcoin has since recovered to just over $30,000.
- The drop represents a decline of about 30% from Bitcoin's all-time high of $42,000.
The price of Bitcoin has bounced back after falling as low as $29,400, which represented a 30% drop from its all-time high. The coin has rebounded to its current value of $30,700.
The sudden drop today came when Bitcoin fell by over $2,000, in the last 24 hours after starting the day above $32,000. As a result of the dip, Bitcoin declined by almost 15% against the US Dollar, and by nearly 5% against its largest cryptocurrency rival Ethereum.
Bitcoin traders who were optimistic that Bitcoin’s price was due to increase were disappointed. This price correction caused over $50 million in liquidations of long positions, indicating that many traders might expect Bitcoin to drop even further.
According to Coinalyze, the majority of these liquidations occurred on Binance, which saw approximately $22 million liquidated today. Coming in second is ByBit, which saw almost $15 million worth of liquidations take place as Bitcoin dipped below $30,000.
But despite the price drop, there remains a sense of optimism that Bitcoin will reverse course.
Wow. #Bitcoin just bounced hard off the bottom of the December/January price channel maintaining @100trillionUSD's S2F slope from the December run up. Feb 28 in the channel ranges from $36-60k. Buckle up. pic.twitter.com/akfXaHkfVW
— Bill Barhydt (@billbarhydt) January 27, 2021
Abra Global CEO Bill Barhydt tweeted that Bitcoin’s price could range from anywhere between $36,000 to $60,000 by February 28, 2021.
30% drop reminiscent of 2017 rally
In 2017, Bitcoin rose from a mere $1,000 to almost $20,000, which was then an all-time high in price. It did so on the back of five corrections that all saw Bitcoin’s price fall by at about 30%.
That means there are a few ways to look at this recent price drop.
One is that Bitcoin is on its way down, having seen a big peak in recent weeks. The other is that Bitcoin is still in a bull run that has a long way to go, and that this 30% drop may be just another hurdle on that road.
In this sense, it could be following the path it went down in 2017, which saw the coin rise 20X from its previous all-time high.
This argument is buoyed by institutions continuing to invest in Bitcoin.
Skybridge Capital COO Brett Messing told Decrypt that Bitcoin might reach $500,000 if institutions like Microstrategy continue to buy into the cryptocurrency. In addition, Messing even said Bitcoin could reach $150,000 within the next 15 months.
“I will be surprised if we don’t get above $100,000 in the next 15, 16 months,” Messing added.
And Messing is not alone in that assessment.
Ark Invest Management today suggested that Bitcoin could reach $500,000 if institutions allocated anywhere between 2.5% and 6.5% of their portfolios into Bitcoin.
And that’s exactly what MicroStrategy CEO Michael Saylor is trying to achieve.