Bitcoin Slips Below $20,000; the cryptocurrency market will remain unstable

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Bitcoin Slips Below $20,000;  the cryptocurrency market will remain unstable

Bitcoin, the most common cryptocurrency in value, fell by an average of 12% and with that, the global cryptocurrency market also felt the jolt, hitting its lowest point in August. Bitcoin was trading at $19,850 as of 12:35 PM (IST) on August 29, at the time of this report’s filing. It should be noted that this price is lower than the June closing price. “The crypto market is not immune to general volatility like the broader stock markets. Additionally, the number of crashes we have seen in crypto over the past few weeks and months – from the collapse of Terra Luna to the bankruptcy of crypto hedge funds like Three Arrows Capital – has made retail investors very reluctant to stay in this space,” Kunal Chowdhry, CEO, Apollo Singapore Investment, told FE Digital Currency.

Meanwhile, experts attribute the Federal Reserve’s stance on monetary policy as the main reason for Bitcoin’s downfall. “The increase in interest rates and the conservative monetary policy adopted by the Federal Reserve are proving detrimental to the entire field of cryptocurrencies, including Bitcoin, Ethereum and XRP, among others,” said Tushar Gandotra. , co-founder and CEO of FiEx.

Moreover, since cryptocurrencies and tokens are highly volatile, industry experts believe that the sector would continue to witness some kind of instability. “Macroeconomic factors such as inflation, employment rates and interest rates do not show substantial signs of recovery. For this reason, all global markets are affected,” added Arpan Shah, founder of Prosppr, a crypto investment firm.

Courtesy: Tradingview

Additionally, the $20,000 mark is believed to have provided support for Bitcoin as it hit its lows in recent months; it had not fallen below $20,000 until Saturday. Meanwhile, many analysts have identified $20,000 as a crucial level for Bitcoin, but support levels may also be below. “Cryptocurrencies are very volatile because they are part of an unregulated legal system. The fall in the crypto market can even be seen based on influencer tweets,” said Anshul Agarwal, Founder and Director of XR Central.

Cryptocurrencies, which were trading at $951.77 billion, fell 2% in the past 24 hours. However, the overall trading volume fell by almost $17 billion, or $54.09 billion. “Factors affecting trading volume aside from inflation include the implementation of the cryptocurrency tax and the lack of global crypto regulations,” said Laxman Singh, founder of Bitbatua, a crypto payment gateway.

Table of buy and sell levels BTC/USD (Binance). Source: Materials Indicators/Twitter

For industry experts, “money is flowing out of risky crypto assets. We are far from bottoming in crypto markets and until we see clear tailwinds that will bring retail investors back in this space, falling cryptocurrency prices will be the norm for the foreseeable future,” Chowdhry added.

It is believed that “financial advisors recommend crypto investors to have 5% or less of their investments with cryptocurrencies and to diversify their investment portfolio. Although most investors are unaware of this strategic way of capitalizing on cryptocurrencies, they might be affected by the current scenario,” said Vijay Pravin Maharajan, Founder and CEO of bitsCrunch, an analytics firm. blockchain.

Read also : As India Takes One Of The Top Spots Among Top Crypto Investors, The Government Is Cracking A Whip To Control It

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