Bitcoin, Ethereum and the cryptocurrency market as a whole is experiencing a very turbulent week due to big sell-offs that came as a result of bad news both domestically and abroad. Most of this bearish sentiment can be attributed to Elon Musk proclaiming that Bitcoin is not an environmentally-friendly digital currency as well as reports from China that cryptocurrency mining is being banned. Here is what CNBC has to say on the topic of Bitcoin and Crypto market volatility:
It’s been a rude awakening for bitcoin investors who thought they could handle the crypto volatility. The world’s largest digital currency suffered a 30% one-day drop last Wednesday, falling to about $30,000 apiece. Just in mid-April, bitcoin hit a record high of $64,829. The turbulence was dramatic even by crypto’s standards. The last time bitcoin saw a decline of this magnitude was March 2020 at the height of the Covid pandemic. And even then, the trading wasn’t as jarring.
Furthermore, Peter Berezin of BCA Research added:
“The drubbing that cryptocurrencies have received over the past two weeks is just a taste of things to come,” Peter Berezin, chief global strategist at BCA Research, said in a note. “Crypto markets will continue to face tighter regulation. … In the near term, the pain in crypto markets could drag down other speculative assets such as tech stocks.”
Nikolaos Panigirtzoglou, managing director at JPMorgan added:
“Despite the recovery in prices to around $40k, the momentum signals, and in particular the longer lookback period one, remain problematic as a signal,” Nikolaos Panigirtzoglou, a managing director at JPMorgan, said in a note. “It is too early to call the end of the recent bitcoin downtrend.”
Looks like it could get worse before it gets better by the sound of it, so always we would like to remind everyone to stay focused on the long term growth of the industry rather than being swayed by day to day swings in the short term. Remember, think like an investor, not a trader and you will always come out ahead in the long run!
