Crypto Put to the Test: Will it Survive?

This past week has been one of the worst for crypto in many months. After a series of double-digit gains and the promise of an ever-upward rise to Bitcoin prices north of $10,000, we had to sit back and watch crypto put to the test. At the time of writing, Bitcoin was trading at $5,626.44 just hours before we watched as prices slid as far down as $4100 per coin. Just seven days ago, prices stood at $9000, then slid for two days with BTC trading from $7000-$6000, then the plummet to low $4000’s on Friday morning. Many believe that BTC has found its bottom, but others still predict a rocky near future for Bitcoin and other cryptocurrencies alike. If Bitcoin has reached rock bottom the minor gains through Friday’s trading day may indicate that the bulls would like to take control of BTC’s tailspin. 

Before considering when and how fast Bitcoin will make its climb into bull territory once again it’s important to know what caused the price route to begin with. There are a series of global factors that led to uncertainty in the market, such as the global pandemic, and oil war between Russia and the United States, and the Fed rate cut, among others. Each of these events carried significant weight and affected the global financial systems in their own ways. That said, no one of them would have had the power to create such turmoil as what we are witnessing today. For that, orchestration was a key factor. One event leading into the next and that into the next, and so on. 

Crypto, in an unusual turn of events reacted to global trauma in the same ways other, more traditional assets did. Stocks and bonds plummeted as did other safe haven assets like gold and other precious metals. Bitcoin is used to a sense of aloofness when it comes to market stability, acting on its own pretenses and market movements. As we can see now, however; global acceptance of Bitcoin and other cryptocurrencies has resulted in the crypto market mirroring those of traditional assets. 

Is there a silver lining?

Is there a silver lining? The short answer is yes. There are a few indicators suggesting that things will turn around for Cryptocurrencies. The effects of the global pandemic, geo-political conflict, and panic in the markets will soon subside leaving nowhere for the otherwise intact crypto market to go but up. 

The current prices of common digital coins are so low that buying in large sums right now is going to be difficult to avoid for both short and long-term investors looking to earn on future gains. That, along with a push by bulls to raise value before the incoming halving event suggest strong support for bitcoin moving forward. In addition, as the Fed injects trillions of freshly printed money into the US economy to stimulate growth and stability those fearing inflation will likely turn back towards BTC which will once again be seen as a safe haven. 

With so much up in the air right now in terms of market stability, it’s really anyone’s guess as to where BTC’s bottom is. Most would suggest at this point, though, that we have already hit it or will soon.

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