The crypto markets today woke up to a sea of red after Bitcoin price crashed a further 5% from last week’s lows. This fresh crash brought it down to a new 6-month low of $30,269 and has many investors panicking.
Last week, traders were at a loss at what direction Bitcoin would take, following the FED interest rate announcement. After relatively good news came from Jerome Powell, Bitcoin saw some relief. However, it seems the optimism is fading away.
As of May 9, 2022, Bitcoin and other crypto-assets registered fresh 2022 lows. This erratic and volatile price action from Bitcoin has investors panicking as shown by the Bitcoin Fear and Greed Index.
Bitcoin is currently trading at $31,399, which is a crucial zone of support for the asset’s price.
If Bitcoin breaks below this zone, we could witness a free fall to $13,000 sooner rather than later. However, there is still some optimism for bitcoin supporters. $30,000 has been quite a strong support zone historically and hence, there is really not much to worry about. The support has held its ground approximately four times between January and July 2021.
Trading gurus and financial consultants took to social media and anywhere they could get a platform to air their views about the recent crash and bitcoin’s future. While the majority of experts have argued that Bitcoin is gold 2.0, the price of the asset seems to suggest that investors don’t really have faith in it as a store of value in times of economic instability such as now.
Josh Lim, head of derivatives at Genesis Global Trading thinks that we are witnessing a slow meltdown because the long-term bitcoin holders have been selling. One of the most famous Bitcoin permabull, Michael Novogratz, warned that he sees things getting worse before they get better. Novogratz said, “Crypto probably trades correlated to the Nasdaq until we hit a new equilibrium,”
The Bitcoin chart is not looking pretty. All indicators point to a more difficult and volatile market in the coming weeks and possibly months. However, as Mr. Novogratz says, once equilibrium has been achieved, we can expect to see a bitcoin price bounce of epic proportions. Until then, we’re watching carefully to see how the market fares.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.