Cryptocurrencies started the year in a bullish manner as investors expected a revival in the industry. The rally led to the price of Bitcoin reaching a high of $4200. However, the upward momentum didn’t last and the price has declined recently. It is now trading at $3,500. Its volatility has also eased.
There are a number of reasons why the price has declined. First, there have been no major news to provide support to the industry. In the past, positive news from influential people led the price to rise sharply. Second, there have been increased concerns about regulations and the impact they might have on the industry. A number of countries have announced that they will initiate stricter regulations. Finally, the sentiment of the industry has been weak, especially after the sharp decline experienced in 2018. As such, most people who invested in the currencies in the previous rallies have tried to avoid them.
The BTC/USD pair is slightly above the 3500 level. In the past few days, the price has remained along these levels, which is a sign of consolidation in the industry. It is also a sign that a breakout in price could happen any time. If it does, the price will likely continue to drop and test the important support level of 3000.
