Bitcoin price ! Why did cryptocurrency prices drop?
- Why did cryptocurrency prices drop?
- Why this collapse in the price of Bitcoin and Ethereum
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- Ethereum and Bitcoin Prices Are Tanking. Here’s Why One Expert Thinks Bitcoin Could Drop Even Lower
Bitcoin and ethereum have dropped more than 10% over the last 24 hours, with bitcoin going below $30,000 for the first time since July 2021 and ethereum trading near $2,200. And one expert warns bitcoin could drop even further.
Bitcoin could “doubtlessly get a mini-jump at $35,000, however until we damage the fashion line at approximately $37,000, I’m calling for $29,000 withinside the coming weeks or week,” says crypto professional Wendy O in a current TikTok video.
Cryptocurrency Prices Today: Bitcoin, Ethereum
Bitcoin’s Price Today
- Bitcoin price at the time of writing this article is over $31,000 and Ethereum over $23,000
It’s been a shaky begin to the week for Bitcoin and different cryptocurrencies, in large part pushed via way of means of ongoing macroeconomic uncertainty. Bitcoin, the biggest crypto, dipped below $36,000 Saturday and persisted to nosedive all through the weekend, hitting its lowest factor in over a 12 months Monday.
The crypto markets have been increasingly tracking the stock market, which has been trading in the red recently. Stocks fell sharply Monday, as the market sell-off continued after the Federal Reserve announced its biggest interest rate increase in over 20 years last week.
“The common marketplace has observed the excessive correlation to Bitcoin costs and the overall equities markets,” says Armando Aguilar, head of opportunity techniques and studies for Ledn, a virtual asset financial savings and credit score platform. “The S&P 500 and NASDAQ have had the biggest correlations to Bitcoin with 0.88% and 0.91%, respectively. A correlation of 1 method that they circulate similarly one to the other.”
For weeks, the crypto marketplace — just like the inventory marketplace — has additionally been below strain as buyers grapple with persisted surging inflation, the continuing swirl of monetary occasions stemming an increasing number of from Russia’s invasion of Ukraine, and tighter U.S. economic coverage via way of means of the Fed.
Bitcoin began to descend at the end of last week and continued to fall throughout the weekend, trading between a relative range of $33,000 and $37,000. Bitcoin’s big drop Monday is just the latest reminder for investors that crypto assets come with extra risk and volatility, especially in times of economic and political uncertainty like we’re in now.
“Bitcoin is breaking below some key technical levels as the never-ending selloff on Wall Street continues. The institutional investor is paying close attention to bitcoin as many who got in last year are now losing money on their investment,” Edward Moya, senior market analyst at foreign-exchange brokerage Oanda, wrote in a market analysis. “If the USD 30,000 level breaks, that could trigger a flash crash environment if several whales unload. ”
But Bitcoin’s new low doesn’t come as a surprise to Wendy O, who in April predicted Bitcoin would hit $33,000 sometime before July, based on her technical price charts.
“I tweeted this April 17, 2022: ‘I am getting 2021 April-May vibes, which means potential bearish until July. Things I’m watching [include] price action, inability to effectively breakout, NFTs go off.’” O says.
Even with the big drops, Wendy O is still bullish on bitcoin in the long run.
Bitcoin’s high point of the year so far remains in the earliest days of January, when it nearly hit $48,000. In that same month, bitcoin also dipped below $34,000. Bitcoin has lost more than 50% of its value since its Nov. 10 all-time high above $68,000.
Like all cryptocurrencies, Ethereum tends to follow Bitcoin’s lead. If Bitcoin is falling in price, ethereum is likely falling, too. But ethereum has also been grappling with anticipation for its massive software upgrade.
Over the next few months, ethereum is planning to move from proof-of-work (PoW) to proof-of-stake (PoS), also known as “The Merge.” It’s a big deal because it’ll change how transactions on Ethereum are ordered, making it more efficient and sustainable for widespread use.
Ethereum developer Tim Beiko recently revealed that “The Merge” won’t happen in June as previously forecast, though it’s set still to happen sometime before the end of 2022. “No firm date yet, but we’re definitely in the final chapter of PoW on ethereum,” Beiko tweeted on April 11.
That, along with several other macroeconomic factors, has made for a shaky start to the year for ethereum, which in January dropped below $2,200 — the lowest ethereum’s price had been since July 2021. As of Monday, Ethereum is inching closer to its January low.
What Investors Should Know About Cryptocurrency
The prices of cryptocurrencies are extremely volatile. That means they are just as likely to fall down as they are to climb, and experts say that’s something crypto investors will have to continue dealing with.
As long as you’re only investing what you’re OK with losing and have a long-term investment strategy in place, there shouldn’t be cause for concern with bitcoin and ethereum’s recent drops.
Most financial experts recommend investing less than 5% of your total portfolio in crypto. You should also make sure you’re prioritizing other aspects of your finances ahead of investing in crypto, such as saving for an emergency, putting money away in a retirement account, or paying off high-interest debt.
If it seems like the crypto market has been acting increasingly like the stock market lately, it’s because it has been. Increased institutional adoption of crypto has made its market more intertwined with the stock market, which in turn, has been largely impacted by the war in Ukraine, surging inflation, and the Fed’s tightening monetary policy, experts say.
In the short term, these macroeconomic factors have created some noise and extra volatility in the crypto and stock markets, but this is usual during times of uncertainty.
