The Bitcoin price dropped below USD 100,000. Why? And is there anything to worry about?
Bitcoin price is falling
Bitcoin likes to surprise. When everyone was expecting a “Santa Claus rally”, the cryptocurrency price dropped. Why?
First, let’s take a look at the chart:
On a broader scale, the situation does not look bad, but rather a natural correction. Investors are certainly worried about the fact that we are once again below the psychological barrier of USD 100,000, which many considered not so long ago to be the potential peak of this bull market.
At the time of writing these words, 1 BTC costs USD 95,325, which is 6% less than yesterday and about 5% less than a week earlier.
Altcoins are bleeding heavily: ether has become cheaper to USD 3,290, which translates into a 10% drop per day, and for solan it is enough to pay USD 180, i.e. 12% less than yesterday. 1 XRP costs 2.2%, which is 7% less than 24 hours ago.
However, as in the case of BTC, in the altcoin field we are only talking about a correction of the recent increases, which lasted almost from the moment Donald Trump won the election. A cooling of the market may be useful in this area.
Jerome Powell, who heads the Fed, certainly spoiled the market mood. During the press conference after the meeting of the US central bank, he said that the institution he manages has no plans to invest in BTC. If it was these words that scared the market, it would be strange: the Fed has never declared its intention to buy cryptocurrencies. During Trump’s term, the State Treasury may invest capital in the latter, creating a strategic bitcoin reserve.
The market can be irrational
The market fundamentals remain strong: Bitcoin may play a major role during Trump’s term, BlackRock talks about Ethereum in the context of asset tokenization, and Congress may start creating rational regulations for this industry. Cryptocurrency fundamentals have never been stronger!
If things are so good, why are we seeing declines? As I mentioned: it’s a regular, natural correction. Plus, the market can be irrational sometimes. And this is what it is like at the moment: it is dominated by emotions, not serious, investor thinking.
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