Over the recent years, the cryptocurrency market has experienced a tremendous growth. This surge has…
Bitcoin Rebounds, Leads the Other Cryptocurrencies
In the life of a cryptocurrency investor or trader per se, three things hold important; speculation, volatility and margin. These three concepts determine whether an individual really survives in the industry or fall by the wayside. Remember, cryptocurrencies, save for stable coins are not attached to any asset bases. For this reason, the value of most cryptos reside in the interplay of their supply and demand.
Ordinarily, cryptocurrency investors world over reply on carful market analysis to identify the peak periods to buy their holdings or sell them. In most cases, people would buy when the prices are low but sell when they are high. It is this differences in buy value-sell value that determines the size of margin/profits a person gets. The situation becomes complicated when a currency undergoes a persistent downturn with every analyst pointing at an even oblique future.
Bitcoin went on a chilling ICU
Nobody has freaked out the past few months like a bitcoin investor who has been witnessing the value of the crypto literally plummeting each day. You know every investor expects to really earn big from a rise in the value of their bitcoin. It is not always the case that investors make only profits with no losses. Were it the case that crypto only yields profits then it would have been a free for all.
All news media and serious commentators pointed at a bitcoin which was facing its worst period since 2009. It is expected that so many investors considered or actually sold out their bitcoins in a panic mode to save them from fizzling further.
Just when everyone waited for the knell to be sounded over bitcoin, the crypto yet again pulled a shocking recovery. Those who had sworn to look away from bitcoin maybe have had a period of reflecting and understanding. If there is any lesson a crypto investor needed to learn, especially about cryptocurrency volatility and tumbling value, then bitcoin exemplified it. Bitcoin showed that cryptocurrencies present chances for big wins yet great losses too can about in cases of a downturn.
Bitcoin takes a promising recovery trajectory
On Tuesday 21st June 2022, Bitcoin jumped by 6%. Over the weekend, it had fallen to $17,958.05 which was the lowest since December 2021. Bitcoin has reduced since last year due to aggressive rise of interest rates. According to the Coin Metrics, it rose to $21,420.94. During the same time, Ether rose by about 6% to $1,170.18.
The price of Bitcoin rose at a time when some of the cryptocurrencies were struggling. For instance, firms like BlockFi and Coinbase were laying off their employees. However, according to Yuya Hasegawa who is a crypto market analyst, the Bitcoin weekend dip was not deep enough. He also went ahead and said that, “The macro environment has not really changed from last week’s FOMC meeting: there still has not been a clear sign of inflation coming down and the Fed may still drive the economy into recession by raising rates too aggressively or simply by failing to tame inflation.”
Another analyst who is based in the United Kingdom said that Bitcoin faces resistance at $21, 300 level. It means that in case it can overcome that, then it may reach the $23, 500 level while the short sellers get a short squeeze. The short squeeze takes place when the price of a heavily shorted assets commences increasing. During that time, the short sellers have to buy more of the asset in covering their positions.
Just like the stock market, the investors do tread around the bear market bounces. However, remember that in stock market, the investors do not need to have full ownership of companies or assets. Instead, they own a stake in the blue-chip firms. Therefore, some anticipated that it could fall deeper before experiencing a great rebound. Therefore, the rebound that took place on 21st June was not that deep.