The bitcoin price took a dive on Friday, initiating speculation that the market’s post-China hangover is not going away anytime soon.
Bitcoin entered the week on an incline, quickly recovering from its September 15 flash crash below $3,000. Within two days of that low-point, the bitcoin price had stabilized above $3,500. By September 18, bitcoin had cracked the $4,000 barrier for the first time since the downturn. However, bitcoin found itself unable to advance past that mark, and on September 21 it began to lose its footing.
Early in the day, bitcoin was trading close to $3,900 on every major non-Chinese exchange. The bitcoin price entered a slight decline in the late morning hours but managed to hold above $3,850. At 14:30 ET, bitcoin took a steep downward turn, plunging below $3,600 before the end of the day.
Thursday morning, the bitcoin price experienced a slight bump, perhaps due to Litecoin creator Charlie Lee’s tweet that China will not ban bitcoin mining. However, that progress was short-lived, and the bitcoin price has fallen back to $3,563 at the time of writing.
It is not immediately clear what is driving the bitcoin price downwards. However, it is possible that sustained recovery from the recent downturn will not be so easily attained as early-week trading indicated. It is also possible that traders had not really priced in China’s ban on bitcoin exchanges, as some observers had previously suggested.
However, Charlie Lee has another theory. He argues that traders with deep pockets are propagating fear, uncertainty, and doubt to manipulate the bitcoin price:
The FUD is propagated by large manipulators trying to make money shorting. They know that China ban FUD works and cannot be proven wrong.
In any case, even if Lee is correct–it’s working. Bitcoin is down more than $350 for the day, and the wider markets have shed more than $10 billion.
Featured image from Shutterstock.