Bitcoin’s price has been on a roller coaster ride as of late. After falling below $18,000 in mid-June, it slowly began to recover before taking another nosedive this week. Several experts are saying that the market hasn’t yet bottomed and that it could get worse before it gets better.
So why is the crypto market crashing? And what does this mean for Bitcoin? Keep reading to find out!
Bitcoin’s Decline Isn’t An Isolated Case
Bitcoin’s steady decline has been the headline for crypto news recently, but it’s not the only one experiencing a sell-off. Other altcoins have taken similar hits, with Ethereum, the second-largest cryptocurrency, also taking a hit.
The price of Ethereum fell below $1000 this past weekend after seeing a steady decline over the past week. Experts see a trend in these drops, and many believe Bitcoin is not the only one at risk.
In an interview last week, FTX CEO Sam-Bankman Fried doubled down on the prediction that Bitcoin could fall to as low as $14,000 in the short term.
“I think we’re going to see a lot more decline in Bitcoin before we see the next major up leg,” he said.
Fried’s predictions come as Bitcoin continues to show signs of instability. This past week, Bitcoin’s price fell below $20,000 after climbing back to almost $40,000 in early May.
What’s Causing the Sell-Off?
So what’s causing this sudden Decline in Bitcoin’s price? Many experts believe that it is due to a combination of things, but the main two reasons seem to be:
- Investors are cashing out of Bitcoin and other cryptocurrencies as they cash in on profits from the recent bull run.
- Bitcoin’s price is affected by the overall sell-off of risky assets. This means that investors are selling off Bitcoin and other cryptocurrencies to invest in less risky assets such as gold.
Both of these reasons point to a lack of confidence in Bitcoin and other cryptocurrencies. investors are selling off Bitcoin to invest in assets that they believe will be more stable in the current market.
What Does This Mean for Bitcoin?
In the short term, Bitcoin’s price could continue to decline as investors sell off their assets. However, many experts still believe that Bitcoin will eventually rebound as confidence in the cryptocurrency market grows.
Due to the recent decline in Bitcoin prices, many people wonder if it’s the time to buy Bitcoin. While there is no definite answer, some experts believe that now is a good time to buy Bitcoin as the price is relatively low.
How the market plays out is still up in the air. In the meantime, Bitcoin and other cryptocurrencies will continue to be volatile. So, if you’re considering investing in Bitcoin, do your research and understand the risks involved.
The State Of Crypto In General
The current state of the crypto market is daunting, to say the least. Bitcoin’s price decline has caused many investors to lose confidence in the market.
In addition, other altcoins are experiencing similar sell-offs, which could mean that the market has not yet bottomed. While the future is uncertain, some experts still believe in Bitcoin and the cryptocurrency market.
In an interview with CNBC last week, hedge fund manager Michael Novogratz believes Bitcoin isn’t going away.
“What happened with great technologies like Bitcoin, crypto, and web3.0 is that we’ve seen these parabolic price moves,” he said. “Prices for these technologies got ahead of themselves.”
Novogratz said that Bitcoin would eventually rebound as confidence in the market grows. “Crypto isn’t going away,” he said. “I think it’s going to be a big part of our lives in the future.”
Despite this breath of optimism from Novogratz, the current state of the market is still uncertain. Bitcoin is still at its lowest in months, and the overall market is volatile.
Why The Crypto Market Hasn’t Yet Bottomed
Despite the massive blows it sustained in the past couple of months; experts believe the crypto market may not have hit its bottom yet. Apinify CEO Haohan Xu gave some insights as to why this is the case:
The Bitcoin halving event that occurred in May 2020 led to a drop in Bitcoin’s price as miners were no longer receiving the same amount of rewards. This, in turn, led to a decrease in the amount of Bitcoin being traded on exchanges.
With less Bitcoin being traded, the market became more illiquid, which made it more difficult for investors to buy and sell Bitcoin.
The Lack Of New Investors
Xu believes that Bitcoin’s steady decline will scare off new investors. “The market will truly bottom unless we see a new wave of investors,” he said.
Xu also explains that the current investors are mostly people who bought Bitcoin during the 2017 bull run and are now holding onto their Bitcoin. Xu believes that these investors are not selling their Bitcoin because they believe that the market will rebound and they will be able to make a profit.
Rate Hike By The Fed
The US Federal Reserve recently announced that it would be tapering its quantitative easing program, which could increase interest rates. Xu believes this could negatively impact Bitcoin’s price as it would make It less attractive to investors.
The Uncertainty of Crypto’s Future
Investors are also worried about crypto’s future as a value store. The market crash can be attributed to various reasons, but one thing is certain: Bitcoin and the crypto space aren’t looking so good right now.
Only time will tell if the market has truly bottomed out, if this is just the beginning of its decline, or if the market is going to rebound and make a huge recovery.