Experts have termed the fall in Bitcoin’s price as an “expected healthy correction,” urging investors to stay calm and, if possible, use the crash as an opportunity to add to their portfolio.
The cryptocurrency market looks like it is in the doldrums at this point. For the past one week, we have seen the prices of the two largest cryptos, Bitcoin and Ethereum, fall off a cliff, leading to widespread panic among investors.
A Tumultuous Week
The market crash has wiped out nearly $350 billion over the last two days. After setting its all-time high price of $64,863 on April 14, 2021, Bitcoin is currently trading at $39,720. The cryptocurrency has tumbled nearly 22% over the past seven days.
Similarly, Ethereum, after reaching its all-time high price of $4362 just eight days ago, is not trading at $2638. Over the past seven days, Ethereum’s value has fallen by 33%, and this is the trend currently prevailing all over the cryptocurrency market.
What Triggered The Collapse?
Many experts have been pinning the blame on China’s 18th May announcement that it is banning financial institutions, banks, and companies from trading from providing cryptocurrency services.
However, the markets were already rattled after Tesla CEO Elon Musk tweeted that Tesla would not be accepting Bitcoin as payment. Musk’s tweets caused considerable confusion given the fact that Tesla had just bought Bitcoin holdings worth $1.5 billion. China’s announcement was the straw that broke the camel’s back and triggered the sell-off.
An Opportunity To Buy
Several analysts and experts have moved quickly to allay any unfounded fears about the cryptocurrency market. According to analysts, volatility is embedded in the cryptocurrency market, and a price drop is nothing to worry about. Most experts have called last week’s collapse a healthy correction that opens up the market for investors to buy and add to their portfolio.
Siddharth Menon, Co-Founder of WazirX, believes that the fall was along expected lines, going on to say that in the crypto market, we have seen price movements over 50% in a single day. According to Menon, Bitcoin is still in the “bull run” phase, and he does not see the currency falling below $24,000. He further stated,
“It is a healthy correction because $28,000 is a very good support level, and $38,000 was Fibonacci support level earlier. The price is still within limits. The danger zone will be if it breaches the $19,000 zone, which seems unlikely.”
A Positive Outlook
Some like Prateek Singh, Founder of LearnApp, believe that the price correction will see some investors back out of the market. However, there will be investors who will continue to hold and use the opportunity to buy more in the hope that they will recover and scale even more incredible highs. If the experience from 2017 is anything to go by, this scenario is highly likely.
Chances Of Bitcoin ETF Still High
Head of Ark Investment, Cathie Wood, is still hopeful that the Bitcoin ETF will be approved at some point later this year, even though regulators seemed a little uncertain after their comments on the matter. Wood believes that the fall in price could be a blessing in disguise for the approval stating,
“The odds are going up now that we have had this correction,”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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