Posted by: Evan Faggart September 21, 2014
This article is the first installment of a new weekly series on DeepDotWeb. This new series will serve as a weekly Bitcoin price recap, which will give a description of the price movements throughout the week as well as a measurement of the percent rate of change that the price underwent during the week. Additionally, we will use this report to cover any news stories that had a clear and definite impact on the price, whenever such a news development hits the community.
Now, let us look at a list of the daily opening prices on Bitstamp. Please note that this list shows the closing price on September 20 instead of the opening price; this difference in denotation is due to the fact that the close of the 20th signals the end of the week, and thereby the end of our report.
These prices have been rounded to the nearest dollar value. Therefore, the following description of the Bitcoin price movement for the week will not be 100% accurate.
Sep 14: $476
Sep 15: $478 (+0.42%)
Sep 16: $472 (-1.26%)
Sep 17: $465 (-1.48%)
Sep 18: $451 (-3.01%)
Sep 19: $429 (-4.88%)
Sep 20 (Closing Price): $410
Weekly change: -13.87%
As we can see from the overall 13.87% drop in the Bitcoin price throughout the course of the week, the markets were particularly hectic. For the last week and a half to two weeks, we have been enjoying a relatively stable price that remained in a mid $470s to mid $480s range. That stability came after a period of bearish activity, which was caused by a number of factors; two significant events that had a noticeable affect on the price were the two flash-crashes on the Bitfinex and BTC-e Bitcoin exchanges.
The general trend of sideways action between the $470s and $480s did persist for the first few days of this past week; however the trend ended very abruptly a few days into the week. Starting on Sunday, September 14, the price opened at $476—well within the sideways trend of previous weeks. The price did not move very much during the day, ending up at $478 at the end of the day. Monday, September 15 was similar in terms of price activity, remaining fairly flat and closing out at $472.
However, the trend began shifting downward on Tuesday, September 16. Starting out at $472, the price activity for the day was relatively quiet like the previous days, except for the fact that the price starting creeping downwards instead of staying flat. The day ended at $465, marking the first time the Bitcoin price has fell below the $470s since the BTC-e flash-crash a few weeks ago. The 17th was similar to the 16th, with the Bitcoin price gradually sliding downwards. At the end of the 16th, the price was at $451.
On the 18th, following the creeping declines of the previous two days, the price took a nosedive. Opening at $451, the price suddenly began falling at 7 AM. By the close of the noon hour, the Bitcoin price had fallen all the way to $424. The day ended at $429.
Friday, September 19 brought even more bearish activity to the Bitcoin markets. Starting at $429, the day started on the decline. By the bottom of 6 AM, the price had fallen to $387. At 8 AM, the price took an hourly low of $378.78. This drop into the $370s-$380s marks the first time the Bitcoin price has gone below $400 since early in 2014. For the rest of the day, the price hovered between the low $400s and the high $390s, closing the day out at $409.
The market attempted to recover on September 20th, starting out at $409 and climbing back into the $430s by 12 PM. However, those gains were lost in the latter half of the day, when the price fell back into the low $410s and stayed there for the rest of the day. The week ended at the close of September 20th, with the price at $410.
There has been much speculation in the Bitcoin community about the cause of this rapid decline in the price, with the speculation serving as a point of heated debate. One side of the debate maintains that the general downward trend that has prevailed for several months—not just the rapid declines that happened this past week—comes from increasing merchant adoption. As more and more merchants accept Bitcoin, they argue, the more selling pressure increases due to these merchants converting their Bitcoin revenue to fiat. On the other side of the debate, the argument holds that merchants are not making enough Bitcoin revenue to produce this kind of downward trend. Instead, the real cause of the price drops, they advance, is due to miners dumping their block rewards on the exchanges so they can get fiat to pay their expenses.
In reality, the cause of this week’s losses, and the overall downtrend of recent months, is likely due to multiple factors; these factors are so intertwined and influenced by each other that it is impossible to specify a single one as the definite catalyst for the downward pressure on the Bitcoin price.