Bitcoin
This One Chart Will Change The Way You Look At The Recent Bitcoin Crash
The cryptocurrency space has taken a beating over the last few weeks. Bitcoin (BTC) is down 65% on highs. Ethereum (ETH) is down just shy of 50% across pretty much the same period. If you factor in the pre-South Korean removal prices from CoinMarketCap, Ripple (XRP) is trading at a more than 80% discount to its early January highs.
But here’s the thing: this is a severe correction, sure, but it’s far from the bubble bursting that many are calling.
What’s important to recognize is that those people that have lost money (the only people that have lost money) are those that entered the markets over the last eight weeks or so. Everyone else in the markets have made money.
In other words, it’s only the newer entrants that are sitting on net losses.
Interestingly, it’s the same people that have been hyping this market and that now are claiming its crashing and burning.
CNBC, Bloomberg, etc., were at the forefront of those outlets pushing people to jump into the markets and buy bitcoin, or Ripple, or whatever, as prices ran up in December. And now, it’s these outlets that are fielding so called experts claiming crypto has had its time.
So how does anyone holding bitcoin or other coins deal with the current crash?
Well, take a look at the chart below.
Look familiar? Probably not – it’s the first real collapse we ever saw in the bitcoin price and it happened back in April 2013.
At the time, the price ran up to $260 and then collapsed to a little over $40 within a few days.
But here’s the interesting thing. This period (the end of the third quarter, 2013) coincided with the first time bitcoin started to attract any sort of mainstream media attention. The attention pushed price up as a wave of speculative new money entered the market.
The wave of extra attention pushed the price up and up until it hit an inflection point, the price started to fall and all of the media outlets that caused the run by touting bitcoin to new buyers changed their opinion, called for the death of bitcoin and created a crash.
So, we’ll ask again – sound familiar?
The only difference this time around is that we’re talking about tens of thousands of dollars as opposed to hundreds of dollars in valuation.
The key thing to recognize here is that whatever anyone says, this is far from unprecedented in the bitcoin space and – indeed – it’s something that we’ve seen happen almost to the note, on a number of occasions in the past.
Last time around (so, going back to April 2013), markets took around 7 months to recover. Exactly how long the recovery is going to take this time around is anyone’s guess – it could be longer, because we’re talking about higher per-coin pricing, or it could be shorter based on the dramatically increased daily volume and external interest in the space that exists right now as compares to April 2013 – but that things will recovery is far from a guess.
There are only two sensible things to do at current prices, then.
First, delete Blockfolio (or at least stop checking it every few hours) and ride out the dip. Let the panic sellers exit at the wrong time, do nothing and wait for the price to turn around.
Second, buy buy buy.
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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.
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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