Is the bubble finally on the verge of bursting? Usually every financial bubble has two primary elements, speculative trading and a catalyst, otherwise known as the prick…judging the bitcoin bull run of ’17 it seems as though bitcoin has at least one of those two elements, empirically speaking – the speculative trading.

Initially Bitcoin was the exclusive domain of the technologically succinct – most bitcoin miners were tech-heads, most bitcoin owners were techies as well. As it grew in popularity fueled initially by the excitement of a new currency, the volatility and the promise/hope of cashing in big, more and more laymen, started looking into it. Forks, hacks and speculative trading have all caused bitcoin’s price chart to look more like and audio wave than a legitimate currency’s chart. The biggest drop the world’s most famous cryptocurrency experienced was 71% in 2013 – which many analysts pin to the rush of speculative traders trying to cash in on the bitcoin craze. Other smaller drops in the price of bitcoin were a result of China regulating ICO (initial coin offering) which is essentially a IPO.

Some of the biggest drop though were a result of market sentiment – and this usually happened when “forks” were announced before most people knew what a fork did to Bitcoin.

So why did bitcoin’s price drop 18% to $11,000 on Tuesday? Under the fear that the cryptocurrency would be regulated by South Korea and exchanges would be banned. Of course, fear and paranoia likes company so this caused a sell-off due to further fear that this will open the floodgates of regulation by other countries.

Bitcoin didn’t ride the elevator down alone either – markets’ other cryptocurrency darlings Ethereum and Ripple both experienced a significant drop, 23% and 33% respectively. This is actually a much more significant drop in the region of 40% if you take into consideration its $20,000 peak a few months ago. Is this the prick which will make bitcoin’s price go into a tailspin?

Maybe not, if we look back, bitcoin has been in a downward trend since more or less the beginning of the year and although it continues slipping we haven’t seen the bottom being pulled out…yet. Another effect that is also seen in currency trading is support and resistance. The factors that contribute to support and resistance is in a very rudimentary way – market sentiment, supply and demand. As demand increases but supply remains the same, the price of the instrument will hit resistance, inversely as supply increases and demand decreases the instrument will hit support. Then there is the variable of market sentiment, we have seen bitcoin going into free-fall just on the promise of a fork, rumors of a hack, fear of regulation etc. In actuality these are the only factors that can affect bitcoin prices, unlike government issued currencies that can be affected by geopolitical events, political scandal (you which currency I am talking about), monetary and inflation policy, consumer indices and confidence, industrial production and jobless rate…oh and adverse weather, conflict and even abrasive tweets…ok maybe not abrasive tweets but it’s worth mentioning since sometimes they can affect market sentiment (see N. Korean missile testing crisis).

However, bitcoin and other cryptocurrencies are here to stay, many experts agree, so if you want to buy some BTC in Australia, you might find this guide by Total Crypto to be a useful starting point.