Bitcoin expert warns of crashing to $ 20,000
The Bitcoin price is falling. After record highs in April of nearly $ 65,000, the current value is below $ 30,000. And: It could get a lot worse for investors.
The digital currency Bitcoin fell below the $ 30,000 mark for the first time in a long time on Tuesday. In the morning, the price slipped by 3 percent, a coin of the oldest and largest cryptocurrency by market value cost $ 29,423 on the Bitstamp trading platform.
That is the lowest level in about a month. But it is not far to the annual low. Other digital stocks such as the number two on the market, ether, were also under pressure and lost three percent.
Repeatedly falling below the $ 30,000 mark could lead to further sales. “The market participants may have suffered a psychological crack,” says cryptoanalyst Timo Emden. The recently low trading volume created the perfect breeding ground for the rapid losses on Tuesday.
China is taking a hard line against cryptocurrencies
Bitcoin has recently come under pressure for a number of reasons. For several weeks, the Chinese government has been taking a tough course against the miners of crypto currencies. Miners provide the technical resources needed to encrypt a block of cryptocurrency and generate a new coin.
“In view of the simmering concerns about tighter regulation on both sides of the Atlantic, the situation remains fragile. The greatest headwind for crypto currencies continues to come from the Middle Kingdom,” explains Emden.
“Fragile mood” on the stock market
The “fragile” mood on the stock market also weighed on the crypto market. Investors are still avoiding the risk and taking profits. “This was also evident in the Dax, which also suffered heavy losses on Monday (read more here).
In addition, large central banks such as the European Central Bank (ECB) are intensifying their efforts not to fall behind in the race for the new types of digital currencies.
If the cryptocurrency continues its downward trend, according to Emden experts, one more brand will be the most important factor. “At the latest when the price falls well below the technical mark of $ 28,000, investors have to be prepared for further turbulence. In the worst-case scenario, there is still a risk of a slide to $ 20,000.”
Long-term investors can stay calm
Cryptocurrencies like Bitcoin are extremely volatile. This can already be seen from the fact that a Bitcoin was worth more than twice as much just three months ago as it is now. A record high of nearly $ 65,000 was reached in mid-April. After that, however, the prices of many digital stocks collapsed, which is not uncommon.
However, Bitcoin still has an enormous lead compared to the previous year – long-term investors should therefore not be unsettled by the current price slide. In July 2020, the price for a Bitcoin was still below $ 10,000.