Down 10% in 24 hours: Why the Bitcoin price just hit a 52-week low

The cryptocurrency markets are plunging this morning with the like of Bitcoin, Ethereum and Ripple all plunging in value overnight. As at 10.41am AEST the Bitcoin price sits at US$5,793 (A$8,006) according to, with its price down close to 11% in just 24 hours it’s now sitting at a 52-week low and has been in a bear market throughout nearly the whole of 2018.

So what’s going on?

The bitcoin price can move in unpredictable ways as it’s often described by business commentators as a commodity or store of value and as such the biggest driver of the price is sentiment, which directly impacts supply and demand.

Basic high school economics teaches that as demand for a commodity rises so will its price if its supply cannot be increased. The opposite applies in that as demand falls so will a price unless the supply reduces.

For example, today a 25 kilogram bag of grain is worth a lot less than a standard Cartier watch, however if the world were hit by a catastrophic famine in 2021 the bag of grain would be worth a lot more than the Cartier watch due to the relationship between supply, demand and price.

The same is true of the Bitcoin price as demand is largely driven by the sentiment of potential investors that are themselves swayed by the underlying price direction.

Technical cryptocurrency traders for example will use 20, 50 or 200-day moving averages to determine whether they should buy or sell digital currencies and if these break to the downside it can add to the selling pressure.

The fact that the Bitcoin price has now hit a new 52-week low will be considered a bearish signal by many traders and analysts who use charts to guide them for price direction given the digital currency has no real underlying value as an asset.

Exactly what is causing the steep sell off is unknown, but some have also pointed to uncertainty over the ‘fork’ in Bitcoin, which has seen it split out into Bitcoin cash, with Bitcoin cash also due to split itself again this week.

Bitcoin doesn’t pay a big dividend like ASX blue-chips Suncorp Group Ltd (ASX: SUN) or Insurance Australia Group Ltd (ASX: IAG) either.

But these two blue-chips are unlikely to grow much in the years ahead either…

So why not discover our #1 dividend pick to grow your wealth for FREE here!

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.