OMG the price is going down! – I got to sell!
Thanks God! I did not sell, price gone up!
Indeed the price goes up and down for the “digital gold” as some people refer to Bitcoins.
What might be the reason for that?
There have been many speculations for the price swings of Bitcoins.
If the press is reporting negative, like Mt. Gox lost thousands of BTCs, or the government warns using BTC, or some hackers stole BTCs, … All these pursues people to be on the “safe” side and sell their BTCs, even with losses.
On the other side we hear many good news, like Overstock accepts Bitcoins, huge investments in Bitcoin startup companies, … or Improvements in the usage (user-friendliness or features) can give a positive push to the price.
Sometimes, however, there is good news and still the price is going down. Often just a small drop in the price can bring an avalanche of price changes. This trigger can be just a single seller, who bargains for a better price.
I believe that the reason might be in trading bots. You can find info about a trading bot at https://www.facebook.com/My.BTC.robot . If a certain level is reached, then some bots start to sell, which in turn pushes the price even further down, and so, more bots will follow, … Without a real reason, the price may suddenly tumble. If you look at the sales volume, you will notice that the price drop is always combined with a huge sales activity.
Same is true when bots start to buy again.
Usually the price recovers quickly to a certain value. Some of the bots who have lost, will need some time to recover, therefore the spike goes sharp down and slowly up again.
If you look at the graphics you will see, that over a couple of months you still can see a positive trend in 100s of % from the value of last year. The price swing is good for making (losing) money quickly, but on the long run, the price is always going up.
It must be so, because:
- BTC is getting more and more accepted. Cheap transactions, 7/24 available, small amounts possible, … and many more reasons to deal with BTC.
- There is a limited amount of BTC. Currently about 13 million BTCs. As more people are using BTC, as more the price will go up.
- Daily you can read about more features implemented into the digital currency. Maybe not into BTC yet. If an ALT-coin develops a good feature, there is a chance that BTC will later adopt that feature.
- There are also political reasons, why BTC will stay here, but I am not going to elaborate on that here.
Start using BTC on a daily basis!
If you like the post, share it with your friends and social media (just click the social media buttons at the left side.)
If you find this article worthy then share some Bitcoins with me:
Leave a comment below!
(Checkout our other social sites at the right bottom)