The Only Guarantee Is Volatility
BTC dropped below $30,000, hitting its lowest level since January 28. This drop is due to both the Chinese mining companies moving out of China and increased regulatory pressure on the cryptocurrency industry.
Over just one hour, the bitcoin rate fell by 6%, breaking through the $30,000 support level and reaching a local low of $29,294. When on the rise, the first time when bitcoin crossed the $30,000 milestone fell on January 2. Thus, over six months, BTC fluctuated within $35,000.
The downward trend is not likely to stop soon, and Bitcoin will continue to go down in the coming days. BTC had been balancing between the levels of $30,000 and $40,000 for four weeks. A week ago, BTC was worth about $ 40,000, but in recent days it has experienced strong surges in volatility, after which it started a rapid decline, unable to withstand pressure from several directions simultaneously.
In mid-April, Bitcoin reached an all-time high, just short of $65,000. Yet, the success was short-lived, unlike the one of 2017. In May, bitcoin started to decline again and the correction over two months exceeded 50%.
Bitcoin pulls along with it other cryptocurrencies that are also suffering losses. E.g., ETH fell to $1,754, XRP, to $0.5252, ADA, to $1.02, and the trifling DOGE cryptocurrency, to $0.16490.
The cryptocurrency market began to weaken due to differences between proponents and opponents of Proof-of-Work (PoW) based cryptocurrencies over the negative impact of mining on the environment. Their disputes have led Chinese regulators to put more pressure on mining companies to close or move to other jurisdictions.
The bearish pressure on cryptocurrencies was compounded by the aggressive behavior of the US Federal Reserve (FRS) which moved up its timeline for rate hikes by several years as compared to what was planned in previous years.
The $30,000 price is the support level for Bitcoin. This means that the next targets for the asset price could be $27,000 to $28,000. The main target for shorting traders will be the $20,000 level.
If the price of the cryptocurrency manages to again exceed the $30,000 mark in the near future, it will signal the possible start of a new wave of growth in quotes.
The $30,000 mark is psychological; therefore, the fact that the bitcoin value has broken through this level can provoke a panic sell-off by private investors. We may see a sharp drop in quotes to the $25,000 level within the next few hours. Let us remind you that Tesla acquired Bitcoin at a price of approximately $30,000.
The only guarantee associated with the cryptocurrency space is volatility, and obviously this is what is happening right now.
Despite previous pullbacks, the infrastructure of the cryptocurrency market keeps getting more mature, which has helped to increase institutional support over the past year, as the managers of major hedge funds, pension funds and banks switch to cryptocurrency, while registered investment advisors are looking for ways to provide their clients with access. to cryptocurrencies.
Between mid-September and its peak in April, bitcoin value had gone up by almost 500%. Even with the recent downturn, the growth of the cryptocurrency over the past 12 months still exceeds 200%.
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