Bitcoin Crashed: Bitcoin took a nosedive below the $19,000 mark this week, marking a nearly 5% drop in just 24 hours. Despite some recent signs of recovery from its June 18 low of under $18,000, experts cautioned against getting too optimistic.
Market analyst Marcus Sotiriou pointed out that if Bitcoin fails to hold above $19,000 and instead falls back below it, it could signal a more prolonged bearish trend. The crypto market has been trading within a narrow range of $17,000 to $22,000 lately, struggling to gain momentum amid concerns over inflation, the Federal Reserve’s policies, ongoing conflicts like the one in Ukraine, and a 40-year high in inflation.
Bitcoin’s recent woes can be attributed to two main factors. Firstly, the Securities and Exchange Commission (SEC) rejected an application for a Bitcoin spot exchange-traded fund (ETF) from Grayscale, which disappointed many investors hoping for easier access to Bitcoin through traditional investment channels. Secondly, Bitcoin miners have been selling off large amounts of BTC to cover rising expenses, including increased energy costs and debt service resulting from the Fed’s interest rate hikes.
Despite the recent downturn, long-term investors are advised to remain calm and not to panic sell. Cryptocurrency markets are notoriously volatile, and big swings are par for the course. Experts recommend keeping crypto investments to a small portion of one’s portfolio and adopting a “set it and forget it” approach to avoid emotional reactions to market fluctuations.
For those who haven’t yet dipped their toes into crypto investing, caution is advised. It’s essential to thoroughly research and understand the market before investing, and only commit funds that you can afford to lose.
