Bitcoin prices briefly dropped below $30,000 Wednesday - sparking fears of another cryptocurrency winter.
Other popular digital currencies such as Ethereum and Dogecoin also dropped over the past 24 hours.
Despite the significant drop in cryptocurrency prices, some investors have remained optimistic that the assets will retain their value. Analysts said the fundamentals surrounding the digital currencies are still strong and the market conditions are not similar to those during the last cryptocurrency crash in 2018.
"We are far from a bear market, only traders are freaking out over technicals seen on exchanges like volumes and price action," block chain analyst and statistician, Willy Woo, said.
Over the past year, prices of bitcoin and other major cryptocurrencies rose to new heights after billionaires and large corporations announced their support of digital assets. Mainstream banks also announced massive multibillion-dollar investments in virtual coins.
In April, Bitcoin peaked at over $63,000 per coin. However, the following months saw its value halved as some investors and countries denounced the volatile asset. China recently implemented a nationwide crackdown on all cryptocurrency-related activities - including speculative trading and mining operations.
"Recent news on the China mining shutdown is very reminiscent of China every few years. They've banned banks from using bitcoin, but this is actually different. I've never seen an exodus like this before," analysts at Blockcap, one of the largest bitcoin mining operators in North America, said.
More than half of the computing power used to create new coins and verify transactions is found in China. In May, government officials announced that it was to eliminate all mining operations in the country, sparking what those in the industry called "the great mining migration."
As of Wednesday, Bitcoin's price rebounded from its sub $30,000 low and is now trading at around $33,961.43 per coin - its highest so far this week. Etheruem also recovered from a sharp dip and is now trading at $2,012.23 per coin.