According to Ron William who is the founder and principle market strategist at RW Market Advisory warns Bitcoin price fall could negatively affect other markets. He said this as Bitcoin price tumbled below $13,000 Friday shedding $3000 in less than half a day, although it recovered to $14,000 later on.
“Price is extremely irrational. And now it is looking — if we continue lower — that this could be a broader contagion story for the other markets.”
Many cryptocurrencies also dropped in prices going to Friday, except Ripple which was in the positive gain. Ripple surged $1.24 Friday up from $0.75 same day. It is now trading at $1.12 at the time of this writing, according to data from CoinMarketCap.
“If we get a move back above $17,250, which is the recent technical breakdown level, and then of course the record highs around just under $20,000, we could see a lot of blue skied scope for the New Year, and a lot of people have been citing that,” William said.
“But potentially that might be less on the bitcoin proxy and other cryptocurrencies. Either way I think it’s interesting to caution some kind of risk across other markets because so many people are invested here. So there could be a potential deleveraging situation.”
Although the exact results of Bitcoin price drop could be many, it is possible that the market is not moving given the fall in prices of many other assets. However, other factors could be playing as well such as people diversifying those assets.