Bitcoin BTC has crashed before then why it is bad this time? Lets find out the answer. Is Bitcoin worth investing in? This question has always divided investors into groups. But looking at the current situation of the crypto king makes everyone rethink their opinion. Bitcoin BTC has crashed even before then why is it bad this time? 2022 has been nothing but a bloodbath for the digital token. It is swimming in a sea of red having entered a death spiral and crashed a staggering 55 percent so far this year. At the time of writing on Tuesday Bitcoin BTC was trading at US$20765.12 after falling below US$18000 last week. It is now less than a third of its ATH of US$67734 which it hit in November. Some analysts expect prices to continue to fall after the appearance of the Death Cross.
Investors are stressed and worried with cryptocurrency lender Celsius freezing withdrawals and transfers citing extreme market conditions in a move that was quickly followed by Binance. So much for cryptocurrencies taking on the might of the banking system and putting investors in charge of their money. Now they cant get it. The Death Cross forms when the 50-day moving average MA of an assets price falls below the 200-day moving average. It is indicative of recent selling pressure which causes the short-term average price to go lower than the longer-term average price.
Everything is putting the stability of cryptocurrency at risk that had already been stoked by the collapse of the Luna and Terra tokens and the worlds largest stablecoin Tether temporarily breaking its link with the US dollar in May. Total cryptocurrency market capitalization has now fallen below US$1 trillion to about US$983 billion. In comparison it touched US$3 trillion on November 10 2021. According to experts if Bitcoin continues with the downtrend it will soon meet an unreasonable demise before the end of 2022.
But why is Bitcoin still falling?
There have been several instances where Bitcoin soared more giving investors the hope of reviving their investments. In fact after the Biden administration released the executive orders that encourage making a framework to adopt digital assets the Bitcoin price spiked. The government is also reportedly examining the major opportunities that major cryptocurrencies like Bitcoin have to offer. While this step welcomed those who believe that they can benefit from the greater regulatory conditions several others sold off their Bitcoin holdings leading to a major crypto crash. Besides this the framework designed to control inflation harmed the price of BTC. High-risk value assets tend to decline severely when there are any policy changes.
Due to several reasons similar to those Bitcoins value dipped sending investors into a panic mode. Leaving behind the forthcoming regulatory measures and investor sentiments analysts have predicted BTC investors should also be prepared for the prices of all digital assets including Bitcoin to move about the prices of traditional assets. Lesser-known cryptocurrencies may move with or without the correlation of traditional assets but major assets like Bitcoin and Ethereum would directly co-relate with conventional assets.
Rise in interest even after the fall?
Recently BofA released a report indicating that consumer interest in crypto has managed to rise despite the market correction with many of those surveyed indicating an intention to buy or use digital assets in the future. The survey which polled 1000 existing and potential crypto users found that 91% of respondents had the intention to purchase crypto in the next six months. Furthermore the same percentage of respondents indicated that they had bought crypto assets within the last six months. A full 30% indicated that they had no intention to sell their crypto within the next six months with a similar number of respondents saying they had not sold any digital currencies in the previous six months.
The report indicates growth in interest for digital currencies as a form of payment with 39% of respondents saying they currently use crypto as payment for online purchases and 34% having used crypto for in-person transactions. Of those surveyed 65% reported having less than one-tenth of their investment portfolio in digital assets with only 15% saying they held one-quarter of their investments in digital assets. The vast majority of respondents indicated that they were short-term investors in crypto with 77% claiming to have held digital assets for less than one year.
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