The cryptocurrency market yet again decided to drop lower. This comes after a previous green week, where Bitcoin managed to recover from a low of 33K all the way to reach a high of 45K. On the other hand, BTC prices seem to have taken a turn and went back to a current price of $38K. Why is Bitcoin down, and most importantly, which factors contributed to a crypto bear market? In this article, we’ll tackle all the above and assess whether it’s a good idea to buy Bitcoin at today’s prices or wait for further adjustments lower.
Bitcoin Price Below 40K…again
Bitcoin investors were thrilled to see prices soar from a low of 33K all the way to reach a price of 45K. The next target for Bitcoin was definitely the psychological price of 50K. On the other hand, this did not happen. BTC prices started to sink again slowly until prices managed to break the 40K price.
Coincidentally, the current 38K price falls in between the strong green support area visible in figure 1. This area was previously a resistance that turned into a current support. Usually, prices tend to repeat the same patterns around those areas.
Why is Bitcoin Down?
When engaging in trading activities, it is important to remember that sometimes, markets go up and down with no specific or apparent reason. That’s the nature of the business, uptrends and downtrends are always forming the markets. For cryptocurrencies, there are clear factors that contributed to the stagnation in prices of Bitcoin and then expanded to all altcoins such as Ether and Stellar.
#1 Lower Trading Volumes
Most crypto exchanges are having record low trading volumes. This fact usually predicts lower markets, as the purchasing power vanishes from the markets. Usually, the buyers are responsible for highering the prices of the underlying assets. In this case, there are not enough people buying Bitcoin, the fact that keeps sellers in place and consequently, having lower prices.
#2 Stablecoins are at Record high
When crypto investors liquidate their trades, they often revert to stablecoins such as USDT or USDC. Crypto exchanges require users to deposit traditional currencies and convert them into stablecoins in order to buy or sell cryptos. With a combined market capitalization of more than $130 Billion, the top 2 stablecoins USDT and USDC that currently rank #3 and #5 as the biggest cryptos seem to grow rapidely. This signals crypto investors sitting on the sidelines, waiting for prices to get better.
#3 Europe is not Doing Good
Yes, geopolitics affect prices heavily. There are many talks about the Russia/Ukraine potential conflict on the borders. This event affected all countries in Europe, as they will be dragged into war potentially. When EU citizens are worried, their investment activities tend to get lower, hence lower crypto buying occurs resulting in lower prices.
Additionally, there were talks about Ukrainian people receiving aid in the form of cryptocurrency remittances. When they receive cryptocurrencies, in order to benefit from those funds, the holders will have to sell them for traditional currencies and cash. This fact also contributes to lower crypto prices.
Conclusion
It might be days or weeks before we see any improvement in the Bitcoin price or even other altcoins. The coming week will be crucial to determine whether prices will continue to sink lower, or whether the Bitcoin price will surpass 40K again. For now, it might be a good idea to wait and see what comes next.
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The post Bitcoin Price Crash BELOW 40K! Why is Bitcoin Down Again? appeared first on CryptoTicker.
Bitcoin Price Crash BELOW 40K! Why is Bitcoin Down Again?
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