Bitcoin Price Drops by 8% After a Brief Gain

Bitcoin dipped below $20,000 on Thursday, representing a nearly 8% loss in the previous seven days. Experts predict that prices will likely fall again because of macroeconomic uncertainties and a liquidity problem among crypto businesses. The largest cryptocurrency is down more than 70% from its all-time high of $68,000 last year.

Although bitcoin has dropped below the crucial support level of $20,000, it might quickly rebound since volatility is par for the course in the crypto world. The main concern for investors is still whether the cryptocurrency market is indeed recovering or if this is just another false alarm. Some analysts claim there are warning indications of a bull trap and investors should exercise caution. 

According to Richard Usher, head of over-the-counter trading at BCB Group, “the broader risk climate remains on a knife-edge.”

Investors in cryptocurrencies hope that the worst has passed for the market. From their 15-month lows, bitcoin and Ethereum reached $20,000 and $1,100 respectively on Tuesday. According to experts, that is a deceptive signal that deceives investors into believing that the market has stopped declining and that now is a good moment to purchase. Entrepreneur and investor Kiana Danial believe bitcoin will drop below $11,000 in the next weeks or months. Ethereum might drop as low as $750, according to cryptocurrency expert and educator Wendy O, and bitcoin could reach $10,000.

Read: Will Bitcoin Survive the Current Downturn

According to Martin Hiesboeck, head of blockchain and crypto research at Uphold, the general geopolitical and macroeconomic environment have a greater impact on whether bitcoin holds over $20,000 than cryptocurrency alone. According to him, the market for cryptocurrencies, which has recently been following the stock markets, has suffered from the general market sell-off of hazardous assets. The largest concerns are by far the war in Ukraine, supply chain oversaturation, and inflation.

According to experts, given that prices are at their lowest point in years, this could be a good moment to invest in the cryptocurrency industry. Don’t invest in cryptocurrencies if you can’t handle sudden market fluctuations, which may occasionally be as high as 15% in 24 hours. Purchasing cryptocurrencies at any price carries risk since the cryptocurrency market is unstable and very unpredictable. The experts advise waiting to enter the market until you have determined your risk tolerance and ability.

Finance experts suggest sticking to the two most well-known cryptocurrencies, bitcoin, and Ethereum, and investing no more than 5% of your portfolio in them. Before investing anything you can’t afford to lose, prioritize creating an emergency fund, paying down high-interest debt, and setting up a traditional retirement plan. The NextAdvisor Investability Score identifies Bitcoin and eToken as more advantageous investments due to their long track records and steady value increase.

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