Bitcoin might face another bear market trend and investors should think before investing in it
Major cryptocurrencies like Bitcoin are witnessing a volatile stage in the market. The Bitcoin price has been dropping since late November and early December in 2021. Currently, the market value of BTC is stuck below US$50,000 and investors are getting anxious as to when the crypto will break the barriers and cross the mark. The price of BTC shot up shortly after the Biden administration initiated the executive order that encouraged crypto adoption in the country. According to the order, the Biden administration is currently examining the opportunities created by the rise of digital assets. This report was welcomed with open arms by those investors who believed that Bitcoin will eventually rise in the future, but the order also triggered some traders to sell their Bitcoin holdings. Bitcoin’s initial dive in price from more than US$65,000 to below US$40,000 is somewhat equal to the cryptocurrency losing nearly half of its value. The crypto jumped back above US$45,000 around March, 2, and continued to move forward around US$47,000. This upward trend in prices persisted throughout the week, indicating an increase of more than 15% within the span of a week.
The state of Bitcoin has been quite volatile, the crypto losing more than 40% in the last 4 to 5 months. It is quite clear that Bitcoin is rising, but it is also falling. As crypto that drove the entire growth of the crypto market is going down, investors are left shocked. However, some crypto experts believe that Bitcoin will unbelievably reach US$200,000 by the end of this year.
Why did Bitcoin go down?
Experts say that the present market conditions of Bitcoin should not deter investors from investing in it, instead, they have to understand the reasons behind its current market movements. Besides the speculations, that Bitcoin is being adversely affected by the institutional and national regulations, investors will very soon understand that the prices of digital assets are also somehow correlated to traditional assets. As BTC matures and becomes more widely used, its price becomes increasingly correlated to the prices of traditional assets like stocks. This growing correlation triggers price declines in the traditional markets, which also results in greater price declines for Bitcoin. Monitoring the price movements of the crypto market will also enable the investors to assess the broader financial markets with more efficiency.
Is there going be another bear market trend for Bitcoin?
The answer to this question is very speculative. And, even if this happens, it should not affect your decision to invest in cryptocurrencies. This is why experts have always recommended keeping crypto investments less than 5% in investment portfolios. A bearish market trend will obviously affect the global crypto market adversely, but it is essential that investors keep their financial bases secured before creating a long-term investment strategy. Bitcoin’s latest rise in price is nothing new. Infact, even experts know that the prices will dive down at some point in time; the secret is to stay alert and venture accordingly.
Disclaimer: The information posted in the article is for educational purpose only. By using this, you agree that the information does not constitute any investment or financial advice. Do conduct your own research and reach out to financial advisors before making any investment decisions.
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