According to data from CoinDesk, a New York-based news site specialising in cryptocurrencies, bitcoin prices plummeted to their lowest levels since October 13 on Tuesday evening, citing several variables as the cause of the drop.
According to the website, Bitcoin’s value dropped another 20% to $55,460.96 Wednesday evening from an all-time high of nearly $69,000 earlier in November.
According to Forbes, there appears to be no single factor causing the cryptocurrency drop this week, with the phenomena being triggered by a variety of variables, including “increasing selling pressure, end-of-year profit-taking, and speculation.”
The cryptocurrency market is still in the red:
According to data from crypto exchange WazirX, with all major cryptocurrencies, including Bitcoin, Ethereum, Solana, and Binance, are seeing price drops. While Ethereum fell 0.86 percent to $4,167, Solana fell 1.24 percent to $4,167.
However, the so-called “memecoins” – Doge and SHIB – gained in value, but not significantly; the crypto exchange estimated their increases to be 0.30 percent and 1.64 percent, respectively.
The following are some of the possible causes of the bitcoin crash:
According to John Iadeluca, founder of multi-strategy fund Banz Capital, there has been a movement of Bitcoin from extremely old wallets, which has sparked rumours and fear among investors, perhaps leading to a market price decline.
“Observers are trying to figure out what the movement of Bitcoin from the old wallets means, and whether this indicates large sales of Bitcoin made from these wallets in the near future,” Iadeluca stated according to Forbes.
Bitcoin Has Long-Term Positive Winds:
Bitcoin (BTC-USD) has dropped below $60k after reaching an all-time high of $69k months. There isn’t much in the way of news to explain the recent weakness, despite the fact that it comes after a tremendous surge, with BTC still up nearly 100% this year and a similar performance only from the lows in July.
Against technically overbought conditions, some profit-taking was probably overdue, and our lesson here is that a decent pullback of recent gains can ultimately set up the next wave higher.
In many ways, we’re hoping for additional downside to allowing us to buy and add to holdings at a cheaper price. On that note, we anticipate more gains through 2022, as the prognosis for Bitcoin and the larger crypto sector remains optimistic, bolstered by a number of fundamental tailwinds.
It is becoming increasingly clear that Bitcoin and other cryptocurrencies are here to stay. Apart from its usability as a payment method, major financial institutions’ acceptance of cryptocurrencies as a genuine alternative asset class has been one of the main drivers of capital flows into the segment, and in our opinion, the single most bullish driver supporting higher prices until 2022.
According to an analysis by Ark Investment Management, institutions around the world could add $100,000 to the price of Bitcoin by committing just 1% of their wealth to it.
To Conclude:
Crypto bulls should look forward to the near-term volatility because it will allow them to build larger positions and average in at a lower cost. We believe that the price of Bitcoin will continue to rise in the long run, aided by a number of tailwinds.
It won’t be a straight upward trajectory, but the ingredients are in place for the crypto sector to keep rising. A rebound in BTC back above $60k, which would set up a retest of the all-time high, would be the first step for the larger crypto market to regain momentum.
We also anticipate that after Bitcoin reaches $75k on the upside in 2022, the market will set its sights on $100k as a significant milestone.
