Why bitcoin fell and whether there is hope for recovery
Bitcoin in the moment collapsed to the levels of February 2024. Participants of the cryptocommunity thought about the reasons for the fall of the crypto market and the prospects for the development of the situation
We tell you why bitcoin fell and what is the forecast for the cryptocurrency against the background of the market decline give representatives of the crypto industry.
What is happening with bitcoin
Bitcoin ended last week with a fall. The new working five-day period also began with a decrease in BTC. At the moment, bitcoin dropped to $52,200, a level at which the cryptocurrency was last traded in February 2024. As of the time of writing the review, BTC has recovered to $54,162.
Following bitcoin, the entire crypto market started to fall. For example, the depth of Ethereum's fall reached almost 35% at the moment.
Why bitcoin fell
Several factors could affect the behavior of the crypto market. Let's consider them.
1. Macroeconomic uncertainty. Bitcoin went into decline amid the publication of data on employment in the United States. The number of new jobs was much lower than expected, which increased fears of a possible recession. The Nasdaq and S&P 500 stock indices, whose movements are often repeated by crypto, reacted to the publication by falling.
2. Jump Crypto's actions. Participants of the crypto community paid attention to the fact that Jump Crypto, the cryptocurrency division of Jump Trading, started moving large amounts of cryptocurrency assets such as Ethereum and USDT to exchanges. Representatives of the organization took the steps amid pressure from the U.S. Commodity Futures Trading Commission (CFTC). The liquidation of a large volume of Jump Trading coins played against the market.
3. US elections. The upcoming US presidential election also added uncertainty to the cryptocurrency market. Kamala Harris has started gaining popularity, while Donald Trump, a friend of crypto community participants, is losing ground. Investors are concerned that Harris' victory could negatively affect the crypto market.
4. Central Banks' Actions. The Bank of Japan unexpectedly raised its key interest rate. The decision triggered a drop in Japanese stock indices and put pressure on global markets. The US Federal Reserve's uncertainty over key interest rate changes also added pressure on financial markets.
5. Outflows from crypto-ETFs. Outflows from cryptocurrency funds may have also pressurized the markets. In such circumstances, ETF issuers are forced to sell coins. Their actions put pressure on the cryptocurrency exchange rate.
Analyst Miles Detcher believes that the behavior of the crypto market could also be affected by payments to creditors Mt. Gox and the decline in investor interest in altcoins. He called the situation on the market a "perfect storm", that is, a time of great opportunity.
What now: bitcoin forecast
Many members of the crypto community believe that bitcoin has already passed the local bottom. According to their logic, ahead of the market awaits recovery with the resumption of growth. Optimists believe that the fall should be used to buy coins at an attractive rate.
Trader Eljaboom sees the potential for bitcoin growth resumption. He explained his forecast by the formation of a bullish divergence on the chart of the cryptocurrency. A similar opinion is held by trader SenseiBR_btc. He believes that a bear trap is visible on the coin's chart, which means that bitcoin will soon see growth.
Crypto investor and analyst sunnydecree, in turn, noted that whales use the fall of BTC to buy cryptocurrency at an attractive rate. Such behavior of large investors speaks of their confidence in the prospects of positive movement of bitcoin.
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