According to analysts, Bitcoin's rapid recovery is unlikely as the biggest price drop since March is underway

Rapid recovery of Bitcoin is unlikely as analysts say its biggest price drop since March is underway - dark bitcoin scaled 1 1024x683Despite the slight rebound on Friday morning, some analysts say bitcoin is unlikely to see a quick recovery from the price drop of the past two days.

Bitcoin loses 10% in just one day

Bitcoin fell more than 10% last Thursday to the $ 10.000 mark. This is the largest single-day percentage drop since March 12, when bitcoin prices plummeted about 40% due to a large sell-off in the equity markets.

Some data sources such as Bitstamp have even seen bitcoin declines with a price just under $ 10.000. Priced at $ 10.065 at press time, the cryptocurrency is down more than 19% from its recent high of $ 12.476 on Aug.17. Discover here the quotations in real time of the major cryptocurrencies.

Similar double-digit price declines seen in April and May were quickly recovered in a couple of days, a sign of a buy-the-dip mentality. This time around, however, a rapid recovery to return to recent highs of around $ 12.000 seems unlikely due to the cryptocurrency's increased sensitivity to traditional markets.

The worst may be over

"The worst may be over, but bitcoin could take days to get back to a good footing," cryptocurrency analyst Edward Morra tweeted. Matthew Dibb, co-founder and COO of Stack, a provider of cryptocurrency trackers and funds, said prices could drop below $ 10.000 if global equity markets get back on track.

"Macro factors are currently in play and bitcoin shows a greater correlation with global equity markets in this 'risk free' period," Dibb said. Indeed, the heavy losses on Wall Street appear to have accentuated the drop in the bitcoin price on Thursday.

Joel Kruger, currency strategy expert at LMAX Group and a macro-trader at MarketPunks also sees the potential for further price falls in the wake of risk aversion in equity markets.

However, he still expects bitcoin to eventually realize its potential as a store of value. Additionally, activity in the bitcoin options market suggests that investors are adding weight to positions for a sustained decline in the cryptocurrency.

This week, the one-month and three-month put call data are back drastically into positive territory. This is likely due to investors buying put options (short positions) to hedge buy positions in the spot / futures market, according to Vishal Shah, an options trader and founder of Polychain-backed derivatives exchange, Alpha5.