What Caused Bitcoin Price to Take the Plunge from $1100s?

The best performing asset in 2016, Bitcoin started the new year on a high note, only to witness a sudden drop in its price. For many, who are used to the cryptocurrency’s volatility, it didn’t come as a surprise.

bitcoin price chart

bitcoin price chart

Bitcoin has had a good run, thanks to unprecedented demand, which defied the predictions of qualified analysts. The initial demand for cryptocurrency probably originated from the Asian and European countries following their economic and monetary crisis. The initial rise in demand was mostly organic as those who were looking for alternative investment options started buying into the cryptocurrency.

The positive Bitcoin price rally influenced people to hold on to the digital currency for longer periods than usual, effectively reducing the supply of Bitcoin for trading. The situation, in turn, had a compounding effect on the price, leading to further increase which led to panic buying among many. All these factors left the market asking for more liquidity.

The unrealistic rise in Bitcoin price due to increasing demand and hoarding practice, pushed Bitcoin’s price to the edge, awaiting a trigger to bring it

Read more ... source: TheBitcoinNews

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