Despite a recent bounce, bitcoin dropped to below $4,000 early on Friday (March 13), according to a report by CoinDesk.
It reached $3,867, which was the lowest level seen since March 25 of last year. It has since recovered from that low.
Bitcoin is down over $2,000 from a high of around $8,000 early on Thursday (March 12). The cryptocurrency now has a 27 percent loss YTD, even though it gained 46 percent last month and was trading at $10,500.
Bitcoin briefly overtook gold, but that changed on March 13 – gold now has a 7.5 percent YTD gain.
The digital coin fell almost 39 percent on Thursday (March 12) in the midst of a massive sell-off in risk assets due to coronavirus fears. As a result, crypto derivatives exchanges saw some forced liquidations.
“The latest bitcoin correction has pushed BTC to oversold levels last seen in September 2019 and November 2019,” tweeted Morgan Creek Digital Co-founder Jason Williams.
The relative strength index (RSI), a metric used to measure relative crypto value, saw a score of 15, the lowest since November of 2018. The RSI ranges between zero and 100, with anything below 30 signalling that bitcoin is being oversold.
“Bitcoin will regain poise with risk assets, which will start seeing a sustainable recovery once there is stabilization in the coronavirus infection curve,” said Mike Alfred, co-founder and CEO of Digital Assets Data.
Alfred said that bitcoin falling below $5,000 would only be temporary, as there is a lot of demand from long-term holders who bought the coins before the big jump from $6,000 to $20,000 in Q4 of 2017, and the subsequent jump at the end of 2018.
If the coronavirus crisis doesn’t slow down, it’s possible there will be more slides in equities and bitcoin could stay high in value, although it tends to fluctuate rapidly.
As of Friday (March 13), there were more than 12 million addresses that purchased coins under $5,700, and the coin was trading at $5,625.58 at 5:40 p.m. EST.