Bitcoin is currently trading around $ 7400. In the past week or so, it has fallen by roughly 10%. This clearly indicates that the negative trend in Bitcoin is continuing. Many investors are trying to figure out what exactly is driving the price of Bitcoin downwards.
Reasons for stagnation:
The announcement by the Justice Department that it will be opening up enquiring into the manipulation of Bitcoin as well as other cryptocurrencies is keeping it in a range. It has made its suspicions public. This is the reason why Bitcoin is not able to move up. Any such enterprise manipulation will be pretty significant for most of the cryptocurrencies. If indeed, it is determined that there is price manipulation, the faith of the investors in Bitcoin as well as other cryptocurrencies will decrease significantly. This is one of the main reasons why Bitcoin can fall even further.
The other cryptocurrencies like Ethereum are also falling consistently. Ethereum is trading around 5 $ 88. It has broken the $ 600 mark. Similarly, Litecoin is also trading around $ 120. This clearly indicates that none of the cryptocurrencies are in a bullish trend right now.
Bitcoin Cash (BCH)
Bitcoin Gold (BTG)
Why is Bitcoin falling consistently?
The probe by US Justice Department is just the latest factor. In addition to that, the regulatory framework which is being increased is also causing the Bitcoin fall. Moreover, that is a suspicion that Bitcoin, as well as other cryptocurrencies, are being used for illegal purposes and money laundering. That is why many authorities all over the world are conducting investigations about the use of cryptocurrency for illegal activities.
According to finance professor in University of Texas, John Griffin, there is little to no monitoring of the price manipulation of Bitcoin as well as other cryptocurrencies. As a result, manipulating the market is actually very easy. Recently, Bitcoin prices at the peak of the day. After that, they have fallen by over 20%. Such volatility in Bitcoin prices is actually pretty normal. That is why authorities think that there are price manipulations in the Bitcoin market.
It remains to be seen the result of such a probe which is being conducted by the US Department of Justice. Only once the results of the probe or out, it will be easier for the investors to decide whether they should continue to invest in Bitcoin or whether they should curtail the position of Bitcoin and other cryptocurrencies in the portfolio.