Bitcoin
Here’s How To Play The Current Bitcoin (BTC) Crash
The cryptocurrency markets have taken a real beating over the last couple of weeks and especially throughout this week, with many of the major coins (bitcoin, Litecoin, etc.) trading at a more than 50% discount to their price just a few days ago.
This, of course, has translated to a real weakening of sentiment and the confidence that many of the later entrants had in their (arguably late entry) positions has all but dried up. People are exiting the market in spades and the selloff is resulting in a further weakening of price. This, in turn, is translating to more panic and an increased number of market exits and so on and so on.
This sort of action will be familiar to many.
It’s a self-fulfilling spiral that compounds sentiment and it’s essentially the opposite of what caused bitcoin and its peers to run up into the end of last year. Late entrants forming weak and fundamentally inaccurate biases and responding to these biases by pulling the trigger. In November and December, it was a trigger pulled on a buy position. In January, the trigger is being pulled on a sell.
The thing is, now is not the time to sell.
Sure, markets got overexcited at the end of last year and some coins ran up farther than they perhaps might have done if the crypto space had of remained under the radar. Sure, the entry of a futures market and the concurrent wave of media coverage that came with bitcoin shifting into the mainstream consciousness perhaps created a buying frenzy which, in turn, pushed prices above and beyond sustainable levels.
BTC Daily Chart
When this happens, however, we generally see a correction, a bottoming out, some degree of rationality return to a market and, in turn, a return to the overarching trend which, in this case, very much remains to the upside.
People forget that Bitcoin (BTC) was trading below $900 this time last year. Litecoin (LTC) was at $5 twelve months ago. Some of the more functional tokens, things like Ripple (XRP), were trading for fractions of a penny. Many didn’t even exist.
What we’re trying to say here is that the vast majority of coins that exist in today’s market and that are down circa 50% or so on early month January highs remain up thousands of percentage points on their respective twelve-month pricing.
Put things in perspective, then, and you see that this pullback is a natural correction on an overheated market and one that simple serves up a long overdue return to sensibility, as opposed to any indication that the cryptocurrency run has come to an end.
For those who need a bit of persuasion, look at this space as if it’s a thirty-year trend, a long-term technological shift. We’re less than a decade into it and while exuberance led to the space running away with itself a little, the excitement is now reigned in and the industry can resume on the path towards changing the technological (and indeed, global industrial) landscape of the future.
Bottom line: let the panic sellers exit their positions cheap and, if you’ve got the capital, pick up some cheap coins as they unload. When things return to normal, the same sellers will be scrambling to buy back their coins and will be forced to do so at a premium to the rice at which they’re unloading them right now.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency.
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Bitcoin price dumped hard on Monday, briefly slipping below $41,000, erasing gains recorded in the previous week. The premier cryptocurrency seems to have exhausted its recent rally propelled by industry vulnerabilities. At the time of writing, the world’s largest cryptocurrency was trading slightly lower at $41,385. Bitcoin’s total market cap has dipped by 2% over the past day, while the total volume of BTC tokens traded over the same period climbed by 58%.
Fundamentals
Bitcoin price has been facing retracements and a rollercoaster over the past few days after recently rocketing to a 20-month peak. On-chain data has suggested that many investors used the opportunity to take some profits, leading to a decline in the asset’s price.
Bitcoin’s price slump is mirrored in the wider crypto market, with the global crypto market cap decreasing by 1.85% over the past 24 hours to $1.55 trillion. The total crypto market volume has increased by 32% over the same period. The Crypto Fear and Greed Index has plunged from a level of extreme greed to a greed level of 70, suggesting a decline in risk appetite.
Ethereum, the largest altcoin by market capitalization, is currently trading at $2,167, down almost 3% for the day. Meme coins have been hit hard by the market slump, with Dogecoin and Shiba Inu down by more than 4% over the last day.
Last week on Thursday, cryptocurrency experts took notice of…
Bitcoin price edged lower on Thursday despite optimism in wider markets on the back of the Fed’s interest rate decision. The flagship cryptocurrency has been consolidating above the critical level of $42,000 after briefly topping $44,000, its highest level in 20 months. Bitcoin was trading 0.71% lower at $42,569 at press time. BTC’s total market cap has increased by more than 3% over the last day to $832 billion, while the total volume of the asset traded over the same period jumped by 22%.
Economic Outlook
Bitcoin price has been trading sideways over the past few days, suggesting a pause in its recent rally towards $45,000. The premier cryptocurrency has decreased by 4% in the past week but remains 15.22% higher in the month to date. The digital asset has staged a significant recovery this year after a torrid 2022 in which a string of scandals, including the collapse of FTX, led to a market meltdown, undermining the credibility of the sector.
The crypto market has been buoyed by the Fed’s latest interest rate decision. The US Federal Reserve on Wednesday held its key interest rate unchanged for the third consecutive time, in line with market expectations. With the easing of the inflation rate, members of the Federal Open Market Committee (FOMC) voted to keep the benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%.
Additionally, the central bank indicated that three rate…
Bitcoin price has been hovering above the $43,000 psychological level over the past two days amid anticipation about the potential approval of a spot bitcoin ETF. The flagship cryptocurrency has climbed more than 16% in the past week and nearly 170% in the year to date. Bitcoin’s total market cap has increased by nearly 5% over the past 24 hours to $858.9 billion, while the total volume of the token traded rose by 43%. The Bitcoin price was trading at $43,914 at press time.
Fundamentals
Bitcoin price has posted significant gains over the past few days, climbing to its highest level since April 2022, before the crash of a stablecoin that started a litany of company failures, pummeling crypto prices. The world’s largest cryptocurrency briefly topped the crucial level of $44,000 on Wednesday amid rising momentum despite being massively overbought.
According to analysts, with no spot bitcoin ETF approvals yet and the halving event five to six months away, the market is riding on FOMO. Capital has been flowing in the Bitcoin market amid enthusiasm that the launches of spot ETF will bring in billions of dollars of new investment into the crypto sector.
Investors have already started providing capital as seed money for ETF products. Notably, a recent report by CoinDesk showed that the world’s largest fund manager, BlackRock, received $100,000 in capital from a seed investor for its spot bitcoin exchange-traded fund…
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