Although it has recovered some of its overnight declines, the bitcoin (BTC) price is still down 5% since this time yesterday to US$9,155.44 according to Coin Market Cap.
This means that the world's largest cryptocurrency has lost 21% of its value in the space of a week, leaving it with a reduced market capitalisation of approximately US$154.9 billion.
Where next for bitcoin?
The bulls believe that bitcoin is free to push higher now after the "Tokyo Whale" finished selling US$400 million worth of coins.
The so-called Tokyo Whale refers to the trustee looking after the defunct Tokyo bitcoin exchange Mt. Gox. According to CNBC, this person has sold more than 35,000 bitcoin to pay off creditors in recent times. This is believed to have weighed heavily on price action.
Although Mt Gox is still in possession of a significant amount of bitcoin, any further selling is believed to be on hold for the foreseeable future.
However, not everyone is bullish on bitcoin. A note out of Goldman Sachs has warned that the cryptocurrency could drop to below US$6,000 again.
Analyst Sheba Jafari has stated that if the BTC price were to fall to between US$7,000 and US$7,500 per coin, its technical analysis indicates that it would then be likely to drop below US$6,000 soon after.
If bitcoin were to fall to this level, it would mean a decline of approximately 35% from the current price.
What about the other cryptocurrencies?
As the majority of cryptocurrencies tend to move together, Goldman's prediction would almost certainly be bad news for the likes of Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). Which could make buying either of these cryptocurrencies quite risky at present.
But finally, it is worth pointing out that many analysts have predicted declines that never eventuated. Whether this time is different, time will tell.
