Bitcoin’s fall below the US$30,000 level has come after a long week of sideways action that saw BTC prices bounce between the US$32,000 and US$40,000 range, according to data from CoinMarketCap. Major factors for Bitcoin’s dip appear to be the ongoing clampdown by China on the cryptocurrency industry as Beijing’s attitude toward crypto mining hardens and Chinese provincial administrators issue successive crackdowns.
“I think what’s happening right now is a lot of the retail investors, the people who bought towards the top in the mid US$50K range, even maybe early US$60K range, are feeling very, very desperate about their holdings being halved, essentially. So they’re giving in to the fear and selling,” said Justin d’Anethan, head of exchange sales for Eqonex, a digital assets firm, in an interview with Forkast.News.
Despite the dip to US$28,893, Bitcoin’s price managed to make a quick recovery to US$34,243.64 less than 12 hours later, according to CoinMarketCap.
“Prices were already relatively constrained in the lower US$30,000 level. And then growing concerns not just about China’s crackdown on miners, but on the cryptocurrency space in general dampened the retail enthusiasm and definitely took us lower all the way down to $28,000,” d’Anethan said. “But then the interesting thing is, prices jumped back up very soon after.”
Bitcoin investors feel the fear
Bitcoin reached its all-time high of US$64,000 in mid-April after a strong and sustained yearlong bull run which drew many retail investors into the space, along with institutional inflow.
However, BTC prices fell by over 35% in May on the back of growing concerns raised by Elon Musk on Bitcoin mining’s negative environmental impact as well as the renewed regulatory crackdown in China. Heavyweight investors like Michael Burry, the head of Scion Asset Management, also warned the public that the “mother of all crashes” is about to hit crypto.
“Current price movements can be frightening for new retail traders, those same traders that might be tempted to invest in meme coins and other such hype-tokens,” said Ben Caselin, head of research for AAX exchange, in an interview with Forkast.News .
Eqonex’s d’Anethan also believes that many new retail traders probably bought in late in Bitcoin’s bull run “towards the top in the mid US$50K range, even maybe early US$60K range” and have been feeling very, very desperate about their holdings being halved”.
“They’re giving in to the fear and selling. I actually think that most of the buying that has triggered the recovery to US$34,000 is being done by institutional players that may have missed out on the bull run and are actually getting into the space.” Said d’Anethan, “Later on they may issue statements saying that they actually did get involved and pushed prices back up.”
What’s the outlook on Bitcoin?
Although Bitcoin’s price is struggling, Bitcoin’s market dominance — or BTC’s share of the total cryptocurrency market — has continued to rise and is currently at 47%, suggesting that investors are once again looking for safety in the original cryptocurrency. But where are Bitcoin prices going in the long term?
“The longer out the Bitcoin price prediction, maybe the more fundamental it is, but it’s also harder,” d’Anethan said. “I’m still very bullish on cryptocurrencies in the long run, even end of the year, which is just in six months. I think we can definitely have another leg up.”
But other high-profile investors are not sure Bitcoin prices will recover to their April heights any time soon. Three days ago, Robert Kiyosaki, the best-selling author of “Rich Dad Poor Dad,” predicted that the markets will soon face the “biggest crash in world history.”
“Waiting for Bitcoin to drop to 24 k,” Kiyosaki tweeted.
Bitcoin’s price is at US$33,743 at the time of publication, with the total cryptocurrency market cap at 1.35 trillion, up 1.5% in the last 24 hours.