Will Bitcoin Price Recover After Its Deepest Drop Since 2020?
Bitcoin’s (BTC) price fell to its lowest level since December 2020 on May 12, as a result of the current crypto market massacre. The current negative pattern is very comparable to the previous mid-season bearish trend, which ran from May to June 2021. Bitcoin’s price broke the $30k barrier level in both market collapses. It just plummeted more than it recovered in June 2021, when the BTC’s worth stopped falling at $29,800. In the present market conflict, however, its price has reached $26,3000.
In both cases, several macroeconomic variables influenced the crypto market. For example, prior to the negative trend in 2021, Chinese banks discouraged the use of cryptocurrency by prohibiting crypto services for the state’s financial sector. Then Elon Musk fueled the flames by withdrawing his intention to accept Bitcoin for Tesla payments. Similarly, the COVID-19 distortion forced some large governments to withdraw from the blockchain business, causing the BTC price to collapse drastically. Similarly, in the most recent slump, geopolitical situations and macroeconomic factors have determined Bitcoin’s fate. First, the Russia-Ukraine crisis had a significant impact on the crypto price, with authorities implementing harsh regulations on a daily basis at a time when Bitcoin is beginning to grow globally. Then, due to legal uncertainty and Fed regulation of digital assets, the market fell even more.
The crypto market’s peculiar behaviour drove investors to liquidate their holdings, ignoring the losses they had incurred. As a result, the value for the following measure has been reduced. The number of crypto traders with 1,000+ coins in their wallets has already hit a low of 2,234, and this figure was reported on May 11. Again, May 11 established a new record for Bitcoin network transactions as crypto investors hurried to sell their holdings. With 175,146.8 BTC, it has set a new four-year record for the trading volume. The number of committed transactions has recently surpassed prior highs.