Bitcoin reached another milestone today, with the cryptocurrency falling below the $400 per-coin mark. Bitcoin sold for over $1,100 inside of the last 52 weeks.
The price correction was driven by news from China, as it often has been. Fresh rumors of a government crackdown on the currency in the country, which could blunt demand and adoption, and therefore impair its value, sent the price of bitcoin down a quick 10 percent. It has since continued to slip.
According to Bitcoin Average, the average price of bitcoin is currently around $388, down from a 52-week high of roughly $1,132. Coinbase has the current price of bitcoin at around $394, down from a peak of $1,126.
Bitcoin had a good start to 2014, rising from around $770 to north of $900. Here’s the Coinbase one-year chart:
It’s worth noting that total bitcoin transaction volume has also weakened in the past few weeks. Here is Coinbase’s chart of bitcoin transactions per day. Keep an eye on the trend following the early March spike:
Divining the next short-term move in bitcoin’s price is something of a fool’s gamble — and I am as guilty of this as anyone — meaning that recent declines could merely be a trough. But with falling volume and falling prices, bitcoin’s vital signs are not as strong as they once were.
As we’ve discussed ad nausem, bitcoin’s network is the key to its value. However, it could be that the network’s activity has not grown quickly enough to support declining speculative interest in bitcoin. That’s my best guess, at least.
So here’s the question: What next centennial mark will bitcoin reach? $300 or $500?