Investing.com – While the largest cryptocurrency has briefly bottomed out at $30,000, it has been painful for the bulls of the major coin.
Bitcoin, the main engine of the cryptocurrency world, plunged to its lowest level in 2021 for less than an hour on Tuesday, but quickly rebounded near the $35,000 levels. It recorded gains of more than 5.5 thousand dollars during trading on Tuesday, an increase of nearly 20%.
Bitcoin is now rising in these moments of trading today, Wednesday, by about 4% at levels of $ 33.9 thousand, while it swings between a top of $ 34.3 thousand and a low of $ 28.8 thousand. The market value of the largest digital currencies is now about $712 billion, compared to $609 billion during yesterday’s trading, meaning that it rose by more than $103 billion. And the market value of the cryptocurrency market increased at these moments to more than 1.35 trillion dollars after descending to the levels of 1.2 trillion dollars, an increase of more than 150 billion dollars.
Bitcoin’s rises affected the performance of altcoins, led by Ethereum, which rebounded above the $2000 levels. It has now increased by about 3.3%, while rising from a low near yesterday, near the levels of 1.5 thousand dollars, with an increase of about 25% during the past 24 hours.
Have we reached the bottom?
Analysts believe that the recent declines, despite their severity, did not result in reaching the final bottom out of the tunnel of the last successive declines since the peak of last April. The pressures on Bitcoin and the cryptocurrency market in general have been violent, says Eli Lou Rist, partner at digital asset management firm Exo Alpha. “Chinese market participants have been selling broadly over the past month,” Le Rest added.
Le Rest explained that “the opening schedule of Grayscale leads to more selling pressure”; Which led to some panic selling by less experienced traders in the market. But that wasn’t the only reason, Lou Russet noted: “As new entrants into the crypto market see their profits and capital shriveled up in sell-offs, the new entrants are losing out because they can’t stand this negative volatility any longer.”
25 thousand dollars
Because of these pressures, Low Rest believes the market could range in the “lower $25,000 to $35,000 tranches” in July in conjunction with the low volume we typically see in August with the potential to “accelerate this downtrend or build up the uptrend.” David Levichitz, managing partner and chief investment officer at Exo Alpha, cautioned against letting up on caution as the volatile nature of the cryptocurrency market makes pinpointing a bottom difficult.
“However, it is too early to tell if this is a ‘bottom’ or just a temporary floor before further downside downside,” Lifshitz said. “The lack of any bullish catalyst, coupled with some conflicting oversold metrics, remains the biggest hurdle. For cryptocurrencies to bounce back.”
I must fall
Iqbal Gandham, Vice President of Transactions at Ledger, said a downturn in cryptocurrency is inevitable; Given the recent rises. “Any asset class that surges too high is expected to correct in the same way we saw in cryptocurrencies,” he wrote in emailed notes. He explained that Chinas intensified crackdown on cryptocurrencies, including bans on mining and trading, has only amplified the downside. However, he believes that “the fundamental fundamentals of the crypto-asset world have not changed, as violent volatility will continue to be a dominant feature of the market’s performance.”
Sean Rooney, head of research at Valkyr Investments and director of crypto assets, said the ban on crypto-mining activities in the People’s Republic of China has forced mining operations to shift to other regions outside of China. The head of research added that this may take some time to resolve itself.
“Recent regulations in China have forced many miners to pack up and look for alternative sites,” he wrote. Rooney predicted that “a drop from the $65,000 high of more than 50% suggests that bitcoin traders may find themselves in choppy waters for weeks to come.”
At least part of the drop in bitcoin prices is due to miners being forced to sell their bitcoin stocks to offset the cost of closing, said Nick Mancini, research analyst at crypto-sentiment analysis firm Trade The Chain. “The market is currently being overwhelmed with supply as Chinese miners are selling their cryptocurrency to cover the cost of closing operations,” he explained.
“This has a negative impact on all prices, with altcoins being the most affected,” the analyst emphasized. Mancini predicted that savvy investors “might want to see bitcoin in the $20,000 range.” This indicates that it may drop to this level, which indicates a possible reversal is at hand.
To be sure, there is no one-size-fits-all model for investing in cryptocurrencies, and buying depends on investors’ tolerance for losses and their long-term perspective.
Nicholas Cowley of DailyFX writes that such recessions are not uncommon in cryptocurrencies. But he said new investors may be more inclined to hold the bullish trend; Due to the recent collapse in cryptocurrency prices. “We’ve seen these moves before and we’re likely to see them again, if you believe in cryptocurrency and you own it, your exit strategy has been pushed too far,” Cowley said.
Crypto watchers have said that the sector tends to operate in four-year cycles, which begin with euphoria and then crash and end with a continuous period of price declines. That was the case so far in 2013, 2017, and the latest moves this year.
The article does not express a recommendation or nomination, but rather a mere monitoring of market fluctuations, as trading in digital currencies involves high risks, including the risk of losing some or all of the investment amount, knowing that it is not completely subject to financial authorities and markets.