Bitcoin experienced a downfall of 44% after the American Independence Day celebration. The cryptocurrency plummeted from $68,000 to $36,500 in just 24 hours. Bitcoin and Ethereum have both recorded gains over the past couple of weeks. Bitcoin has managed to overcome $60,000 but has now fallen below it again. Cryptocurrency experts are warning investors that cryptocurrencies may crash even more.
Other cryptocurrencies like Dogecoin and Shiba Inu also suffered tremendously. Other cryptos have seen their prices fall by nearly 10%. Bitcoin is still down by more than 20% this morning, while other major cryptocurrencies are at a loss of nearly 8%.
Bitcoin (BTC) continues to trade below $20,000, plunging to new annual lows as the overall cryptocurrency market remains depressed.
On Monday, July 4, the flagship cryptocurrency remained just above $19,000 after maintaining stability over the previous seven days. By press time, the asset was trading for $19,600, up little more than 3% in the previous 24 hours.
Bitcoin’s current price is a pale reflection of the cryptocurrency’s performance over the last year. Notably, since the last independence day on July 4, 2021, Bitcoin has traded at $35,287, a decline of around 44 percent from its current price.
To be noted, Bitcoin also experienced a massive decline during the first two weeks of May this year when it traded at $64,257. This brought its year-to-date price to $34,932 at the time.
Why Did Bitcoin And Other Cryptocurrencies Fall?
Experts believe that this could be caused by a minor news event. News events could cause investors to sell off their holdings as they assume that stocks will rise in price. Though this may not be the exact reason, it is one of the possibilities. Another possibility is that whales liquidated their holdings to prepare for the holidays.
Since a bearish run is always on the way in the crypto market, some investors may have also liquidated their holdings and bought back cheaper coins in anticipation of a rally. Though this may bring Bitcoin up, it won’t be able to erase the loss of price seen over the past few days.
Other cryptocurrencies like Dogecoin and Shiba Inu have also suffered tremendously. Other cryptos have seen their prices fall by nearly 10%. This includes the likes of Cardano, Ethereum, BNB, and Solana. Dogecoin has now fallen by more than 20%, and Shiba Inu has recorded a drop of nearly 16%. These are all red candle patterns that indicate that a short-term trend may change within the next trading day.
Other cryptocurrencies like ADA and XLM have also suffered immensely in this sell-off. Both have lost more than 8% in the past 24 hours. However, both are still well above the $1,000 mark.
What next for Bitcoin?
The cryptocurrency market is currently focused on Bitcoin’s next price move, particularly because the commodity is trading below the 200-week moving average. Notably, past occurrences of asset trading below this level have signaled the conclusion of the bear phase before a rally.
According to crypto trading specialist Michael van de Poppe, assessing whether Bitcoin has reached a bottom is nearly hard given the market conditions, but technicals imply the position is just around the corner. The trade expert stated that emotions about Bitcoin are favorable, especially given the likelihood of widespread adoption and a decrease in inflation.
Poppe believes that if Bitcoin retests around $12,000 to $13,000, it will be the final level for the asset to the bottom. He did, however, rule out the possibility of the commodity falling below $10,000, but warned that it is critical for Bitcoin to maintain its value above $16,000 in order to avoid additional negative momentum.
“It’s quite probable that we will see the price of Bitcoin at $10,000 again, but I think it is a lot more likely that we will see it at $20,000 or $30,000, which is still a very significant increase in value,” Wiggin said.
He also noted that cryptocurrencies are not just a “fad” and that they could potentially be a “game-changer” for the global financial system by introducing an entirely new asset class.
However, he added that people need to do their homework before getting involved in crypto.
“What I am saying is that the risks of crypto are pretty significant. There is a risk that you can lose all your money. If you invest in crypto, there is a risk that you could go down the drain. You should only invest what you can afford to lose,” he stated.
What is Bitcoin’s Potential to Rally?
Furthermore, Poppe stated that in order for Bitcoin to rise, it must first break above the $20,200 barrier, after which it would likely sweep all recent highs and proceed to $21,000. Overall, the market expert feels Bitcoin’s chances are dependent on exceeding the level.
“If Bitcoin breaks through the $20,200 level, I don’t think there will be a lot of resistance at all before we get to $30,000. That could still happen, but if it doesn’t, then we are looking at $60,000,” Poppe said. He added that if the digital asset was to break out to $40,000, that would be “huge” for the sector and could take crypto to the next level.
“It’s not just the size of the market, but it’s also the speed of the adoption. If this happens, we are talking about a game-changer in global finance. I don’t think it’s a fad anymore. It’s actually something that can change the financial system for the next generation,” he added.
However, the crypto expert stated that unless Bitcoin reaches the $60,000 mark, the chances of the asset rallying are unlikely. Finally, in June, Bitcoin saw a sharp drop marked by negative momentum. As a result of the price change, Bitcoin had its worst quarter ever, dropping its value by more than 56%.
Despite the steep downturn, many experts feel that Bitcoin is starting to show an uptrend, and it will likely start climbing to a new value. It is anticipated that once the digital asset reaches its $50,000 target, it will begin rallying again.
Right now, the majority of traders believe that Bitcoin is still on track to reach that goal.
A number of factors have contributed to this optimistic outlook. Chief among them are developments within the institutional finance industry. With an increase in investment, banks and other financial institutions can begin buying Bitcoin more frequently. More adoption by banks can also help stabilize the price of digital currency.
It is clear that Bitcoin experienced a major setback after the American Independence Day celebration. While it is not certain what caused this sudden drop, it is important to remember that the cryptocurrency market is highly volatile. For investors, this means that there is always a potential for both profit and loss. Those who are considering investing in Bitcoin should do so with caution and be prepared for the possibility of sudden changes in the market.