After rewarding its investors with millions of bucks in gains, the world’s most popular digital token’s famous volatility is back. Although some supporters and analysts believe that Bitcoin’s long-term growth looks healthy, the latest fall in price could shed some more value in the coming months. During Friday’s trade, the BTC hit the $50,000 mark, the worst value in almost two months and breaking its fifty-day moving average.
So far, the BTC’s rush to the top has been unprecedented, reaching an impressive 94 percent up year to date. Even gold, which is seen as the digital token’s biggest competitor, fell a whopping 5.5 percent. As of April 23, the coin is down 9.8 percent since Sunday. Earlier this Thursday, the BTC’s dominance in the crypto market capitalization fell below fifty percent for the first time since 2018. So, what’s behind a stop in Bitcoin’s bullish run?
What triggered the race to read?
The sharp decline in the crypto market that also pushed numerous altcoins into red coincided with news of Biden’s proposed rise in capital gains for America’s wealthy class. It likely induced fears among investors to secure their profits now at the present rate gains. You might be wondering, is it the only reason? Well, no, but the fact that a bearish win also joined the cryptocurrency’s decline in Wall Street.
In addition to that, the fall in price came amid unverified reports that the US Treasury Department might come after crypto owners overusing digital assets in money laundering. Besides that, the growing regulator uncertainty is also fueling concerns among investors. The recent spat between Ripple and American SEC is picking up pace, with the federal regular describing the XRP trading as illegal.
What’s the future?
CoinDesk, a prominent crypto-related publisher, maintained that the recent rush to red could further depreciate the currency. Meanwhile, JPMorgan’s analysts suggested that in case of a failure to regain the $60,000 mark could trigger a sharp downfall.
So far, JPMorgan is also unsure whether this time the BTC would follow a quick snap or a sharp decline as it was seen in February this year and November last year. Importantly, experts maintained that the flows into the digital asset have been tepid, and its rush into red seems to be gaining steam.
BTC’s $50k level is pretty important to understand its near-term price direction. A further plunge could destroy the investors’ confidence, with chances of the digital asset hitting the $40k mark, which could open doors for further selling. Meanwhile, experts suggest that given the climate impact of mining crypto coins and its decentralized nature, it could soon attract government regulation.
Since it emerged in the mainstream, the cryptocurrency has faced numerous ups and downs and making it unpredictable, given its high volatility, despite investors’ outstanding efforts. Yet, with the growing acceptance of digital assets, including Tesla, PayPal, Mastercard, and Visa, starting to accept and offer the coin, its future could be quite different. Whether the mainstreaming of the asset would lead to a bullish rush or cause an unpredicted downfall, believe us, it is pretty hard to predict.
Disclaimer: This article is not trading advice. TheDechained holds no liability for investments made on the basis of this information. We recommend independent research before making a decision to invest.