Bitcoin with Black Friday discount

Bargain hunting: Bitcoin with Black Friday discount

Black Friday not only boosts sales in retail and wholesale. Bitcoin also comes along with a “discount” today – the result of an unhealthy price rally.

The latest Bitcoin share price development is probably best described as a “rollercoaster ride”. On Wednesday, the largest crypto-currency jumped to its all-time high. But as quickly as the Bitcoin share price had cleared the way to the record high the previous days: It ended at 19,315 US dollars. From the summit it went just as quickly to the bottom of the valley. Since then, Bitcoin Up has lost almost 2,500 US dollars in value, and with a 24-hour minus of 2.9 per cent has moved further away from the 17,000 dollar mark. At the time of going to press, Bitcoin was quoted at 16,815 US dollars.

Bitcoin price in weekly chart

As is so often the case, various market developments have mutually amplified each other and triggered the current slide in share prices. The most banal reason: Bitcoin itself. In just two weeks, the digital currency has risen by US$ 4,000 to its annual high. Too much in too short a time, as it now turns out.

Just how unhealthily the market has bloated can be seen from the immense range of fluctuation in market capitalisation. On Wednesday, market capitalisation reached an absolute peak of 360 billion US dollars, but fell by 16 percent to 300 billion dollars in just one day. With currently around 318 billion US dollars, it is recovering from the shock. But the pump-and-dump pattern shows Rapid growth was at a high price. The rapid rise of Bitcoin has paid off for investors and has put the price under pressure by profit-taking.

On 26 November, for example, some 2,394 Bitcoin changed hands for the equivalent of 40 billion US dollars and flowed straight back onto the stock markets. As the following chart shows, BTC inflows to the Exchanges have often correlated with a decline in prices in the past. If BTCs are not repurchased to the same extent, the volume of supply will eventually overflow, which can lead to short-term setbacks. This was particularly evident in the market crash in mid-March.