In a month marked by high volatility due to increased uncertainties regarding its mining in China, bitcoin experienced on Tuesday, 22, a drop of almost 10%, trading below $ 29,000, a level not seen since January. And this makes many investors wonder if Bitcoin in a downtrend. Even with a quick recovery during the day, the cryptocurrency became one of the main subjects among economists and crypto-active experts, who, despite the fall, highlight the long-term value of bitcoin.
The drop in the price of bitcoin in recent months is a response to a number of factors in the current market moment, with emphasis on the Chinese government’s contrary stance on cryptocurrency mining and, to comments from big names in the financial market. The hunt for bitcoin miners in China and statements by Michael Burry, the investor who inspired the movie The Big Bet, about excessive leverage in the crypto market are negatively impacting prices.
These factors, such as bans in China and pessimistic comments a possible market crash, are nothing new for cryptoactive investors, who should keep their focus on the long term.
If the price had not risen so sharply since the end of last year, there would be less concern about this fall.
From a more technical perspective, Ki Young Ju, CEO of data analysis firm CryptoQuant, has shown that the market’s current momentum is indeed uncertain and, because of this, deserves increased attention until its direction becomes clearer.
“The market is very uncertain at the moment. We are in a neutral range now. Stop the trades, be patient and wait for the next volatility,” CryptoQuant’s CEO posted on Twitter. Despite this, Ki Young Ju commented that its duration should not be long, pointing out that “the market is still positive in terms of supply and demand in the long term.” So we see it’s too early to say Bitcoin in a downtrend.
According to experts, a drop of this magnitude is not likely to happen again, mainly because of the entry of large investors into the market, who may see the current moment as a buying opportunity for the long term.
Every bank is working on its own crypto-active related project and how to offer bitcoin to its wealthy customers.
Glimpsing the opportunity to increase their position in bitcoin by paying less for the cryptoactive, several companies have made large bitcoin purchases during the downturn, such as MicroStrategy. Headed by Michael Saylor, the company focused on enterprise software development, announced on Monday, 21, the purchase of an additional 13,005 bitcoins for $489 million, which brought the company to over 100,000 bitcoins in its possession.