Bitcoin and the cryptocurrency markets were roiled by bearish news this week that sent prices nosediving before finally easing up a bit.

The price of one bitcoin token (BTC) hovered at $8,505 as of this writing, up 3% from 24 hours earlier. Today's low was $7,924, according to CoinDesk. Other top cryptocurrencies, which typically move in tandem with bitcoin, also tiptoed up today on back of BTC's quiet recovery.

It's a surprise turnaround after bitcoin careened to a low of around $7,600 just days ago. This time last Friday, bitcoin prices coasted along in the mid-$9,000s.

Meanwhile, 8 of the top 10 virtual currencies by market cap also posted gains as of this writing, including Ethereum, Ripple, Neo, Litecoin and Tron. Bitcoin Cash notched an impressive 8.9% increase after lagging all week.

bitcoin price now

(Source: WorldCoinIndex)

Google Shuts Down Crypto

Several important developments rocked the cryptocurrency world this week. Perhaps the most significant was the bombshell announcement that search engine giant Google will ban cryptocurrency advertising starting in June.

The news sent crypto prices tumbling and wiped out $53 billion in the global crypto market. Bitcoin prices tanked 11% in the hours following the news, and has yet to fully recover. (See more: Google Ban Fuels $53 Billion Wipeout In Crypto Market Cap.)

Google was following the lead of social media juggernaut Facebook, which enacted a similar embargo three months ago. Bitcoin prices crashed 12% in late January after Facebook announced its ban, citing the need to weed out ads that are "frequently associated with misleading or deceptive promotional practices." (See more: Facebook Bans Ads for Cryptocurrencies and ICOs.)

bitcoin price now

(Source: CoinDesk)

Crypto Collapse Caused By Mass Sell-Off?

Meanwhile, some market observers cited tax avoidance as a key driver of bitcoin's plunging prices this week. Tax experts said cryptocurrency owners have been rabidly selling off their holdings in order to avoid paying capital gains taxes.

“They're stuck with a large tax bill and they're doing payment plans, or they're selling off crypto," observed Vincenzo Villamena, CEO of OnlineTaxman. (See more: Bitcoin Price Crashed in Mass Selloff as Crypto Owners Try to Avoid Taxes.)

Others attributed the erratic crypto price movements to a bitcoin whale in Japan "dumping" his holdings in a firesale. Still others say recent moves by the SEC and the IRS are having a chilling effect on the unregulated virtual currency market. (See more: IRS Wants to Tax Your Bitcoin Gains: Orders Coinbase to Hand Over User Data.)

Peter Thiel Goes Long on Bitcoin

Despite all the real or imagined reasons for crypto's turbulent week, billionaires like PayPal founder Peter Thiel remain bitcoin bulls.

Thiel compared bitcoin to gold, said it would outlast all other virtual currencies in a crypto "Hunger Games" scenario. The politically conservative entrepreneur, a supporter of President Trump, is going long on BTC, and has bought up large amounts of it. 

Thiel made the remarks at the Economic Club of New York yesterday. (see video starting at 29:22.)

"I would be long bitcoin, and neutral to skeptical of just about everything else at this point, with a few possible exceptions. There will be one online equivalent to gold, and the one you'd bet on would be the biggest.

"[Bitcoin is] like bars of gold in a vault that never move. It's sort of hedge of sorts against the whole world falling apart."

Despite his confidence in bitcoin, Thiel conceded there's still a 50% to 80% chance that BTC ends up crashing to zero. But, he said, there's also a 20% to 50% chance that its price could skyrocket again. (See also: Peter Thiel Goes Long on Bitcoin.)

Thiel – whose net worth tops $2.5 billion – said what's moving the crypto market is the same force that makes the world go around: The pursuit of riches, which "is the bubble that never pops."

Technical Analysis: Bitcoin Could Crash to $2,800 Soon

Meanwhile, technical analysis suggests bitcoin prices will continue to tank in the near term. (See also: Bitcoin Faces 'Death Cross' Chart Pattern.)

“There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017,” technical analyst Paul Day, head of futures and options at Market Securities Dubai Ltd, told Bloomberg.

To him, that means bitcoin prices could nosedive 76% from its late-February highs and tumble to $2,800 soon, if the downtrend continues. (See also: Tesla Billionaire Elon Musk Reveals How Much Bitcoin He Owns.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.

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