Bitcoin price is dipping again – here are some possible reasons why

Bitcoin price is dipping.

Bitcoin price is dipping. Photo: Shutterstock

Christian Ploog

christian.ploog@trijo.co

For the first time since March 19, the Bitcoin price has fallen below $7,600. During Thursday morning, the price was $7,490 at Bitstamp. That could be compared to the top of $8,150 just 20 hours ago.

During the past few hours, the sell volume for Bitcoin has intensified.

The market has probably been affected by the volumes of the so-called futures contracts for Bitcoin found at the Chicago Board Options Exchange and CME Group, writes the crypto news site CCN.

A futures contract is an agreement to buy or sell something at a specified time in the future at a predetermined price.

According to the well-known analyst PhilCrypto, the market for Bitcoin futures contract has hit a record over the past 24 hours, and most of it seems to be sell volumes.

When Bitcoin futures contracts were introduced on the two major US stock exchanges last year, many believed that it would have a positive effect on the Bitcoin price, simply because it would mean that more money would come into the crypto market. Instead, the futures contracts seem to have had a negative impact during the recent months.

Large-scale institutional investors have not been able to influence the Bitcoin price on the crypto exchanges to their advantage through these futures contracts, which have led retail traders to try to sway the market by moving large sums of money, writes CCN.

Share graph.

Share graph. Photo: Shutterstock

The fact that both Twitter and Facebook have banned cryptocurrency advertisement have had little impact on the price of cryptocurrencies, according to CCN.

The main reason for the advertising ban is to prevent marketing of ICOs. Most ICOs have been found to be either failed projects or frauds, according to reporter Nathaniel Popper at the New York Times.

The ban on advertising is therefore judged by many as logical, which makes it overreaching to argue that the prices of cryptocurrencies have dipped because of that, writes CCN.

However, one could argue that a ban on advertising of ICOs on Facebook and Twitter also leads to reduced investments in these. It will simply be harder for ICOs to reach out to potential investors, which then would lead to fewer investments. And because these investments often are done with Bitcoin or Ether, this can affect the prices.

Now what?

It is far from certain that a quick recovery in the market will take place, at least if you look short-term.

On the other hand, some experts believe that there may be a rally later this year.

“I talk to hedge funds, high net worth individuals, even commodity speculators. They look at the volatility in the crypto markets and they see it as a huge opportunity. Once that happens, all hell will break loose”, said Bill Barhydt, CEO at Abra, a fintech company that produces a consumer peer-to-peer mobile payment service, to Business Insider recently.

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