Weekly Bitcoin Price Analysis: Bitcoin Collapse Last Week
Mike Hearn’s statement on the Bitcoin crisis is not enough to halt the era of Bitcoin. BTC has much more potential for growth and investor confidence.
Last week the Bitcoin price decreased by $80, from $440 to $360. The fall began with the correction and ended with a sharp collapse. The reason was the performance of the former Bitcoin Core developer and Bitcoin supporter – Mike Hearn, who decided to leave the digital currency ecosystem, which, he believes, is going through a large-scale crisis. He argues that the foundation of Bitcoin is undermined and will have a downward trend in the long term. According to him, Mike Hearn sold all his coins.
After the speech of Mike Hearn the cryptocurrency market reacted immediately. The price of Bitcoin went down rapidly, it reached $360 first and then bounced up to $372 during the Asian session.
However, the reaction of the market, can be expected as a pulse and does not reflect the real situation between supply and demand of Bitcoin. Here's the comment on the situation with falling prices of Bitcoin given to Cointelegraph by Simon Dixon, CEO BnkToTheFuture.com and Fund Manager at Bitcoin Capital:
“The price is reacting to core developer Mike Hearn’s announcement that he is exiting Bitcoin. This has created a lot of uncertainty for investors as they grow concern about how to scale Bitcoin now transaction volumes are at record highs. I think Mike Hearn has created the urgency needed to capture the Bitcoin markets attention and help the miners realise that developers can affect their profits if they don’t collaborate with developers that wish to scale. As somebody that was at the Scaling Bitcoin conference in Hong Kong with core developers and miners I have faith that the Bitcoin community will develop sensible solutions to the great news that transaction values are at record highs. The uncertainty has caused a short term sell off that may continue, but Bitcoin is more resilient in the long term than the exit of one core developer. This is good news for Bitcoin long term as it has created the urgency needed to solve the scaling Bitcoin challenge faster.”
How will the market develop further and how long time will it take for Bitcoin to recover from such a blow – we'll see. One thing is clear, that the statements of Mike Hearn alone are not enough to halt the era of Bitcoin. Bitcoin has much more potential for growth and investor confidence. We can assume that the price of Bitcoin will decline for some time, and then we can wait for the reversal and resumption of the uptrend. What do you think?
This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell Bitcoins.