When will the sharp drops on cryptocurrencies end?
July 4, 2021
It has become a matter of curiosity when the sharp declines in cryptocurrencies will end. The BEAR season in Cryptocurrency exchanges has caused many investors to be upset and bankrupt. So when will we see the rise?
The sharp decline in cryptocurrencies that began in mid-April caused many investors to lose. While the loss in Bitcoin reached 50 percent compared to the peak, there were decreases of up to 90 percent in altcoins. So when will the recovery in cryptocurrencies begin?
Those who invest in cryptocurrencies with the dream of getting rich have been in a deadlock for the last 2.5 months. However, cryptocurrencies had a good start to the year.
With the shares of Elon Musk from his social media account, Bitcoin rose rapidly until April 14 and provided a return of over 100 percent. However, Elon Musk, who ignited the rise in Bitcoin, was also the architect of the decline that started from the historical peak.
In mid-April, Musk announced that they were suspending the decision to use Bitcoin in the Tesla sale, noting that Bitcoin mining increases fossil fuel and coal consumption. A blow to Bitcoin, which fell with this statement, came from China. China has announced that it will not allow cryptocurrency mining and trading with cryptocurrencies.
Table of Contents
2021 is a Cryptocurrency Year Worse Than 2018
Bitcoin, which saw its historical peak at $ 64,869 in mid-April and fell with consecutive negative news, fell below $ 30 thousand on June 22. Bitcoin, which had the worst quarterly performance since the end of 2018, lost 50 percent compared to the previous year. Losses were much higher in altcoins. So much so that the losses in some altcoins reached 90 percent compared to their peaks.
For this reason, investors who bought crypto near the top are now thinking about how and when their black and white losses will decrease.
Will Bitcoin go down to $12,000?
Cryptocurrencies are losing more and more value every day. In particular, Bitcoin, which is known as the leading cryptocurrency asset, is getting more hit in this regard. This cryptocurrency, which reached peaks in the first months of 2021, is now in danger of falling even to the level of 12 thousand dollars.
Looking at the statements made by analysts, it is stated that there are 2 important reasons for this sharp decline expectation. The first is the strengthening of the dollar. Bitcoin gained strength with the decline of valuable currencies such as the dollar.
Considered the hub of blockchain technology, Bitcoin has been evaluated by analysts Barry B. Bannister and Thomas R. Carroll. According to them, the dollar gained more and more strength with the end of the pandemic. Thus, cryptocurrencies fell into the background.
In addition to all this, there is another reason for such massive drops in Bitcoin prices. After the pandemic, people are trying to spend instead of saving. For this reason, we can say that investments in digital assets have withdrawn a little more. In difficult circumstances, individuals often focus on investing.
Even if investment companies have a hefty drop target of $12,000, it still won’t happen that easily. Institutional companies offering support for this cryptocurrency quickly gets it back on its feet.
BITCOIN OR ALTCOIN?
There are different views on when the recovery in cryptocurrencies will occur. While some argue that the recovery will start with altcoins, others think that the recovery of Bitcoin, which led the recent decline, will stimulate demand for altcoins. Another topic of discussion is whether cryptocurrencies have entered a bear market or are in a correction. If the markets entered a bear market dominated by a bearish trend, this trend would last at least 6 months according to historical data.
Interest in crypto money IPOs, which has become popular among investors recently, is decreasing. Investors who bought cryptocurrencies from pre-sales in the past have made serious gains as the coins started to be traded. However, after the sharp declines in cryptocurrencies, it is stated that investors are turning to proven and hard-hit projects rather than a new project.
Bitci.com Research Manager Mehmet Çoban: Interest in crypto may increase in September
In the next 1-2 months, we can observe a trend with limited upward movements in the market. With September, it can be expected that the interest in the crypto money market will increase. It can be said that we are partly in a bear market. However, this will not be a long-term process like the bear markets of the past.
Because we now have a market that is very different from the previous bear markets, which institutions are particularly interested in. It is a fact that the cryptocurrency market is currently in a huge financial bubble. And because it is in the same bubble, it is affected by positive or negative developments in other markets. The Fed is one of these factors. But it’s a 12-year-old market. A possible interest rate hike and curbing monetary expansion by the Fed will not have good results for the cryptocurrency market. However, it can be said that the effect of this will be short-term.
AlbCoin Research Manager Helin Çelik: The $40,000 level is critical
The stress experienced recently, especially with the negative news from China, has affected all altcoins, especially Bitcoin. In this process, mining activities, regulatory processes to be carried out by the authorities and the state of financial markets will continue to be decisive.
Recovery may be limited before an overall improvement occurs. In market conditions where the price reflection of Bitcoin is felt, we should first see a recovery in the reactions of crypto money. At this point, the transition to 40,000 can be taken as a basis in the first place. It’s worth noting the fact that digging the bottom can bring prices below 30,000. Cryptocurrencies with a negative correlation with the dollar index and Bitcoin with a low inflation rate can be fed from this situation. In other words, the falling dollar index due to monetary expansion can positively affect cryptocurrencies.