Investing.com – The recent rally in Bitcoin was short-lived as the popular digital currency fell below $7,000 stoking fears that this could be the start of a much steeper decline.
Bitcoin fell 7.96% to $6,878 on the Bitfinex exchange, halting its two-day rally from a low of $6,432.40 on Sunday.
The recent ebbs and flows in bitcoin have led to an intense debate among analysts as to popular digital currency's next move with some suggesting a new low of $4,000 beckons before any sustained rebound can occur.
“Expect prices to undercut February's lows over the next few weeks and that violation to trigger a large wave of defensive selling,” said Jani Ziedins of Cracked Market in a Tuesday blog.
“Don’t expect prices to bounce until we fall into the $4k range. Then and only then will it be safe to buy the bounce.”
Yet, others remained hopeful that improvements in bitcoin “behind the scenes” would trigger a recovery.
“The price has been driven by speculators and they suddenly got cold feet but there’s considerable effort going on behind the scenes, including new underlying technology that is powering faster transactions,” bitcoin expert and the former COO of Skype Michael Jackson told The Independent.
With demand to support a rise in the wider cryptomarket sorely lacking, a move lower in cryptocurrencies appears to be more likely than not.
Data from coinmarketcap.com showed the total market cap of cryptocurrencies fell to $260 billion – at the time of writing – down about 9% from $282 billion on Tuesday.
Ripple XRP fell 6.92% to $0.49771 on the Poloniex exchange, while Ethereum fell 7.72% to $381.76