The Fall of Bitcoin
On Tuesday, Bitcoin tumbled below the long-held support at $30,000, hitting the lowest in six months. This caused to erase all the 2021 gains.
According to the data from Coinbase, the fluctuating cryptocurrency plunged more than 13% to about $29K per coin. Since last December this was the lowest dip and 55% lower than its all-time high of over $64,000 in mid-April.
But as the buyers stepped in to buy the dip, the world’s most prominent digital currency rebounded to $32,400 by US afternoon. This was still down about 25% from a week ago, but it also increased the chances that it will hold the $30K mark. Hence many technical analysts have speculated this recovery as a sign of support for the cryptocurrency.
Other major cryptocurrencies like Ether, Binance coin, Cardano, and XRP came down even more drastically and stumbled to double digits.
The Reason behind The Fall
The speculated reason behind this downfall is because China tightened its crackdown on numerous aspects of bitcoin, including mining and cryptocurrency transactions. China witnesses the world’s two-thirds of Bitcoin mining because of its cheap power.
According to Global Times, presently, more than 90 percent of China’s bitcoin mining capacity is shut down. This new practice will force an exodus of miners to move to greener pastures.
The Ripple Effect
The losses since those headlines have thumped nearly $400 billion off the overall crypto market. The bitcoin value is still up almost 200 percent from 12 months ago, according to Coinbase.
Investing in crypto coins or tokens is highly speculative, and the market is largely uncontrolled. Who could lose their entire investment or who could become a millionaire none can ever tell.