The crypto market experienced one of the largest drops in a year on Wednesday. Bitcoin fell by almost 12%, having regained more than half of the day’s decline by the end of the day. Altcoins from the top ten lost from 23% to 33%.
The fall accelerated after three self-regulating Chinese organizations signed a decree banning crypto business. According to the document, members of their subordinate organizations should not participate in the cryptocurrency business and provide services to cryptocurrency-related companies.
Meanwhile, bitcoin’s Fear and Greed Index dropped to “extreme fear” values.
The level near $ 31,000 – the area of the lows of the January correction – will be a test of strength for bitcoin. If the sellers’ forces outweigh, the rate could very quickly fall to $ 23,000, where Bitcoin was traded at the end of last year, experts say.
Institutional investors started selling bitcoin and shifting into gold, although the previous two quarters did exactly the opposite, analysts from the investment bank JPMorgan write in their analytical report.
The head of the cryptocurrency company Galaxy Digital, Mike Novogratz, believes that the current drawdown of Bitcoin does not change the picture of the overall bullish trend. According to him, the fall was influenced not only by the tax day in the United States, but also by Musk’s fears about the unsustainability of bitcoin.
Talking about the fall of the entire market, Novogratz sees this as an investment opportunity. “Markets shouldn’t be an easy way to make money. If they were, we would all be rich. Markets overheat, then correct. This is normal, ”he said.
The 33% drop in bitcoin over the past two days has not shaken Katie Wood’s confidence in cryptocurrency, as she reiterated Ark Invest’s view that the long-term target price for bitcoin is $ 500,000.
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