Bitcoin Price Suffers Sharp Decline: Sub $300 Triggers New Concern — Where’s the Bottom?

UPDATED: 7:14 a.m. EST 1/5/2015

NEW YORK (InsideBitcoins) — Shortly after 9 p.m. EST Friday night, bitcoin began a price erosion that grew more severe as the hours passed. On increasing volume, traders sold the price from its recent comfort level of the mid $300-teens to near $265, its lowest level since the digital currency began its historic and meteoric rise in November 2013. That marks a more than 16% loss, just in in the first three days of the new year.

By early Monday morning, bitcoin had mounted a bit of a recovery. Just after 7 a.m. EST the price was clinging to the $270s, according to the Inside Bitcoins Price Tracker. However, the impact of developments regarding security issues at Bitstamp, the second-largest USD-Bitcoin exchange, could likely cause further near-term pressure on the price.

With no news serving as a catalyst for the initial sell-off, chartists were looking for technical indicators to explain the sudden drop. One technician boldly proclaimed that $304 marked the bottom of the market and the beginning to a bitcoin bull — that forecast now seems sadly misguided. Another expected the bitcoin price to dip to $290 by the end of 2014. That projection now only seems to have missed by 72 hours and a rounding error.

After a 60% loss for 2014, bitcoin believers are being tested yet again. A New Year brings new lows for the cryptocurrency — either a last-gasp buying opportunity for optimists, or the beginning of the Great Decline for non-believers.

As Hollywood writer-producer Mike Rotman said, “I predict the average price in 2015 will be in the $150 range ­unless someone finally gets through to the masses with simple language, a simple to use app, and all around a great viral marketing blitz.”

Obviously, that hasn’t happened yet. And if the bitcoin price decline continues, Rotman may soon be known more for his price guess than his game show.