Bitcoin drops below $30,000 for the second time in less than a week amid Reddit users causing a surge in GameStop stock.
Below $30,000 Again
Bitcoin (btc) briefly dropped 10% today, 27 Jan, dipping below the key psychological price of $30,000. This is the second time in less than a week the top-cryptocurrency dipped to these levels as it struggles to reclaim bullish momentum.
The fall prompted a market-wide sell-off as several altcoins saw up to 15% in losses. The market’s second-largest token, ethereum (eth), almost broke below the $1,200 mark, with Decentralized Finance (DeFi) leaders such as yfi and aave falling to $29,000 and $255 respectively.
Over the past seven days, the price action has prompted speculation that a correction is underway that could see the market fall further. However, bitcoin’s previous attempts to break below this key level met enthusiastic ‘dip-buying’ from cryptocurrency traders.
This all comes as video-game distributor, GameStop (GME), attracted support from a community that usually backs Bitcoin. Reddit users who are members of the popular subreddit r/wallstreetbets have been promoting GME all week.
The ‘shilling,’ a term used in the crypto-world to describe the spreading of unrelenting propaganda for a financial incentive, caused GME to surge in price on the New York Stock Exchange (NYSE).
Many traditional investors saw this as an opportunity to short the stock for a quick profit. But the surge continued forcing several big funds to capitulate.
Some in the community commented that the attention GME stole from Bitcoin was a possible cause for the dip to $30,000.
Are the Bulls Still in Control?
If that is, in fact, the case, then bitcoin bears may still have to be cautious. Additionally, SkyBridge Capital founder and former White House director of communication, Anthony Scaramucci, sees the GME story as positive for Bitcoin.
In an interview with Bloomberg, Scaramucci said:
“The activity in GameStop is more proof of concept that Bitcoin is going to work. How are you going to beat that decentralized crowd? That to me is more affirmation about decentralized finance.”
Moreover, at press time, bitcoin sits at $30,799.98, suggesting traders and investors are not wavering. If this dip-buying continues, the bulls may still be in control, and bitcoin could be set for new heights.