The price of bitcoin may have just topped $3,000 for the first time, but that doesn’t mean the digital asset is leaving its historical volatility behind.
At roughly 10:00 UTC this morning, bitcoin prices fell abruptly, dropping more than $300 in a span of minutes from $2,980 to a daily low of $2,650. The more than $300 decline came just hours after bitcoin climbed to a new high of $3,000 on the CoinDesk Bitcoin Price Index, a weighted average of prices across major exchanges.
But while precipitous, the decline was short-lived, with prices returning to just under $2,900 a half hour later on the BPI.
According to analysts, early indications are the price capitulation could herald that the bitcoin price has diverged too far from fundamentals.
“It is just standard technical divergences – we made a higher high on less volume and waning momentum,” BTC VIX, organizer of the bitcoin trading forum Whale Club, told CoinDesk. “[This could] signal a weakening trend.”
Indeed, the decline coincided with the closure of millions of dollars in long positions on OKCoin, one of the major leveraged bitcoin exchanges, a development that likely exacerbated the decline.
All in all, however, the price of bitcoin has been surging of late.
Though today’s decline could give investors caution, bitcoin has risen more than $1,000 over the last 30 days as investor interest in cryptocurrencies continues to increase amid a period of robust gains for the asset class.
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