Will Bitcoin Go Back Up After a Sharp 6% Drop?
Bitcoin was recently close to the $100,000 milestone, hitting a high of $99,645, but its gains ran out of steam and fell to $93,415, a drop of more than 6%. The correction has investors questioning whether it’s just a breather or the beginning of a larger recession.
Bitcoin’s value is often compared to gold, as both are seen as a hedge against inflation and economic uncertainty. 10x Research Analyst emphasize Bitcoin’s appeal stems from its limited supply, much like gold’s scarcity. This year, as central banks moved away from the U.S. dollar, pushing up gold prices, Bitcoin followed a similar path.
Major institutions such as BlackRock consider Bitcoin “digital gold,” elevating its status as a trusted store of value. In October, $4.1 billion flowed into Bitcoin ETFs, showing strong interest from traditional investors looking to hold Bitcoin for the long term.
Despite this short-term bullish play, companies like MicroStrategy have doubled down on their investments in Bitcoin, acquiring over 386,500 Bitcoins worth $22 billion. This reflects growing confidence in Bitcoin as a store of value and high-growth asset. According to 10x Research, Bitcoin’s long-term potential lies in its dual role: a hedge against inflation and a better investment than gold.
Technically, Bitcoin is on track
Historically, Bitcoin’s price cycle suggests that the current decline is part of its natural market cycle. Interestingly, back in 2020, Bitcoin experienced an 18% correction after a rally that took about three weeks to recover. If history repeats itself, Bitcoin could rebound and aim for new highs, potentially breaking $100,000 by the end of December.
Institutional interest remains a strong pillar of Bitcoin support. Major players such as BlackRock and Fidelity now consider Bitcoin “digital gold,” increasing its credibility. Bitcoin’s market dominance also continues to rise, taking value away from other cryptocurrencies, a trend known as the “Bitcoin black hole effect.”
What to expect?
Looking ahead, Bitcoin’s performance depends on whether it can consolidate and stabilize after this correction. If it follows previous patterns, it could pave the way for another strong rally. Short-term volatility may continue, with some investors taking profits, but the long-term outlook remains positive.
With the current price of Bitcoin at $96,353 and a market capitalization of $1.9 trillion, the future of Bitcoin looks promising. With institutional support and historical trends conducive to recovery, this could be a temporary pause before the next big move.
