Bitcoin’s price briefly slipped below $8,000 on Thursday for the first time in three months, though the cryptocurrency is still more than double its level at the start of 2019.

What do these bold – and volatile – moves mean for the ecosystem?

David Nage, principal at the Los Angeles-based money manager Arca Funds, discusses his views on this week’s price drop and whether price volatility in cryptocurrencies might turn off big investors.

Nage, who saw bitcoin’s price to be artificially range-bound until this correction, stated:

With bitcoin, where there’s potentially a drop, obviously you can see it as a potential to buy.

Nage believes that as an asset, bitcoin is akin to future-pointing equities like Netflix and Amazon. With the caveat that “we’re not in the business of price predictions,” Nage said:

If supply continues to get cut in half and the demand continues to rise, classical economics shows the price increases.

Catalysts for price action

And while the next halving – a periodic reduction in bitcoin mining rewards, expected to occur around May 15, 2020 – is potentially bullish, both the technical and fundamental views point toward uncertain times ahead for BTC’s direction after its recent sell-off threw into question the long-term trend.

Soravis Srinawakoon, co-founder and CEO of decentralized data governance project Band Protocol, said:

Looking at the technical chart of Bitcoin, we’ve been seeing a squeeze in a descending triangle of the bitcoin price in the past few days. Combined with the recent disappointing launch of Bakkt, it is clear there is an overall negative macro sentiment in the market.

Disclosure: The author holds no cryptocurrency at the time of writing.

Sebastian Sinclair contributed reporting.

Teddy Bear via Shutterstock.

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.