Bitcoin prices have taken a major downturn in the past 24 hours, dropping to a 3-week low of $2.11 at the MtGox bitcoin exchange.
This was the largest single day sell-off in Bitcoin’s short history, with MtGox reporting a volume late Monday of nearly $1 million USD.
Bitcoin prices have been in decline since hitting a peak of $31 back in June.
By October 17, prices had declined to a low of $2.04, weeks later bouncing back to a high of $3.81 before resuming the current decline.
A Bitcoin analyst who goes by the anonymous handle of “S3052”, told his newsletter subscribers on Monday that he has sold all of the Bitcoins he received as subscriber fees.
“I have moved all my fee income into cash, out of bitcoins now,” he wrote.
“…the technical picture [for Bitcoin] is so damaged on all time scales that there is a 80% likelihood for a new low below 2.04 $, and possibly much further in a crash type of sell off.”
S3052 predicted back in late September “that a break of the key 4-5 $ zone would result into a drop into 2 $ or below”.
Indeed, the first two weeks of October saw Bitcoin prices decline from $5 to $4 before the vertical drop of October 17.
S3052, who also publishes the website bitcoinbullbear.com, warned readers that some of the trendlines were running near $1 USD. “This is not a time to catch the falling knife,” he wrote. “It is entirely possible that prices fall even much further.”
S3052 has previously warned that the decline of Bitcoin to $1 or less might deter interest in Bitcoin from businesses, traders and investors.
Despite the current collapse, S3052 says he is still committed to the bitcoin project. “Even a fall to 1 $ or below does not rule out a strong future,” he said.
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