Crypto frenzy loses momentum as Bitcoin slides below $32000
At the beginning of the year, Bitcoin, the star child among cryptocurrencies, was determined on a bull run resulting in an already fueled frenzy reaching a fever pitch.
It successfully managed to hit a new all-time high of $41,000 only to plunge drastically to a value of almost $30,000 just a few days later. Since then its value has continued to drop, closing at the lowest in three weeks, somewhere close to $31,500.
The Bitcoin fever now seems to be starting to slowly break away as worries about a market bubble have been deterring investors from buying in.
Ever since the crypto market skyrocketed, reaching all-time highs in early January, Bitcoin has been plagued by volatility and skepticism. The Bitcoin market tumbled as much as 8.3% on Thursday sliding below $33,000. But it didn’t stop there. It currently registers a value of approximately $31,600 recording a 9.8% fall in just 24 hours. This downward trend has led to accelerated losses in the past two days.
Many analysts have been pointing to $40,000, considering it as the key level required by Bitcoin to pass in order to draw fresh money from investors that are riding the cryptocurrency momentum. They argue that the recent gains from bitcoin booms could prove fleeting and short-lived if the rally stalls and traders shift their money elsewhere in hopes of quick returns. With investors divesting in Bitcoin, its value may be pushed further down as a result.
A number of crypto traders have been diversifying into other digital assets or coins, in the wake of recent developments, fearing that Bitcoin may soon see another collapse. Ethereum, another highly popular cryptocurrency, has seen a great deal of investor interest since the past few weeks and has even managed to hit its personal best just recently.
Apart from that, Wall Street has also expressed concerns that Bitcoin’s 400% rally in the past year makes it too risky to jump in on. In Bank of America Corp.’s monthly survey, Bitcoin was labeled by fund managers as the world’s most crowded trade.
However, while the soaring growth in crypto prices and value has fueled a speculative mania among interested investors and traders, it has also made many seasoned investors reluctant to buy at the top. The values are still more than double the levels from early November and some analysts have been arguing that a retracement is overdue.
There are many key reasons why Bitcoin just won’t die down. The futuristic currency is not only decentralized but is easily accessible, inflation-proof and its highly volatile aspect gives many investors hope that it could blow up any minute resulting in massive gains. Another key reason behind Bitcoin’s undying popularity is the increase in the availability of trading platforms that allow investors to maintain their profitability in dynamic markets.
For example, if you trade bitcoin with Bitcoin Era, a reputed and trusted trading program, you don’t even have to be an active trader to make money. This is because such programs use advanced technologies such as AI (Artificial Intelligence) or ML (Machine Learning) to generate trading signals and help to take advantage of crypto booms.
But right now, Bitcoin seems to be in constant flux, registering many downward trends. Adding to the anxiety, a report has surfaced in a trading blog suggesting that there has been what is known as a double purchase; where the same “coin” is used in two separate transactions. This is called the “double spending” problem.
A chief scientist at researcher Chainalysis has said that sometimes such a situation may come to light. He went on to add that sometimes the Bitcoin blockchain will have competing mined blocks but that only one chain-forming from competing blocks will actually be accepted.
However, Edward Moya, an analyst at Onada has expressed concerns saying that if a double-spending event actually occurred, it would be a major cause of concern for the whole market.
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