The free fall of Bitcoin continues, resulting in hundreds of billions of dollars going down the drain. In the last few weeks, Bitcoin lost nearly one-third of its value and now it’s on course to lose more than 50% of its value. Amid the threat of a Russian attack on Ukraine, some analysts forecast that the biggest dip in cryptocurrency is around the corner. Experts have warned that the price of Bitcoin could slide to as low as $30,000 level.
Bitcoin fell for the sixth consecutive day, settling at an all-time low of $36,372 on Tuesday following the recognition of the independence of two separatist regions in eastern Ukraine by Russian president Vladimir Putin. Not only he has recognized them as an independent country but also directed troops to the region. The impact of the development was quite obvious.
Besides Stock Market and Bitcoin, other currencies also fell as well, with Ether dropping as high as 2.9 percent, and XRP taking a nosedive by dropping as much as 6.7 percent.
The price of Bitcoin fell below $40,000 over the weekend and continued declining as the Ukraine-Russia crisis grew more intense, destroying the claim that cryptocurrency is an oasis in the midst of worldwide political turmoil. In contrast, it was gold which people found more confidence in and, as a result of it, it has reached its highest level since June last year.
“In the globe’s latest maelstrom — U.S./Russia/Ukraine — Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its arch-enemy, gold,” said John Roque of 22V Research in a note on Monday.
Roque believes that the current dip is not enough to excite investors. He predicts that the fall in Bitcoin would continue in the days to come and it could drop below $30,000 reaching the same level it was in July last year. His statement also indicates that gold would be better than Bitcoin in the current scenario as investors increasingly prefer gold, possibly making bullion reach an all-time high in the weeks to come.
As Bitcoin couldn’t get the support at $40,000 and continued falling further amidst the increased tension related to the Ukraine crisis, the possibility of Bitcoin crashing to $30,000 is much higher than ever before. At present, the geopolitical issues are creating a huge impact on the mindset of investors who are looking to safeguard their investment instead of risking it for gains. Investors, across the globe, have started withdrawing their money from the market which is seeding negative sentiments across the markets. Cryptocurrency, especially Bitcoin, is no exception here.
So, what could be the estimated price Bitcoin could fall to before bouncing back?
The answer could be just anybody’s guess! But, few experts are ready to put their finger on a number.
While talking to Bloomberg, Antoni Trenchev, co-founder and managing partner of Nexo, one of the world’s largest and most trusted lending institutions in the digital finance industry, thinks that Bitcoin will hit $29,000 like last summer. However, he anticipates that a lot of buying activity would kick off the moment Bitcoin reaches the $30,000 mark, and then it may be difficult to get a hold on it.
Katie Stockton, founder of Fairlead Strategies, found technical analysis not favoring Bitcoin either. She argues that the currency is trading lower than a long-term support range of around $37,400 now, which is a clear indication that it will have to pass its next crucial technical test at around $27,200.
While it’s difficult to identify a fair value of Bitcoin, it appears that Bitcoin is trading close to an ‘acceptable’ value. A few days back JPMorgan, one of the big four who has put a lot of effort and data to find a fair value of Bitcoin, tagged Bitcoin with $38,000 as a fair value. However, the report also claimed that it could skyrocket to as high as $150,000 in the years to come.
All the latest predictions alongside the crash in Bitcoin have attracted the eyeballs of those who felt to have missed a great opportunity of investing in Bitcoin. Now Bitcoin is trading almost at the half of its peak of $67,582 in November last year, and many are considering buying Bitcoin now. However, the volatility in the cryptocurrency is still keeping them in a confused state, and experts believe that many may end up buying Bitcoin out of FOMO (fear of missing out).
All said and done, given the projection of $150,000 and past peak, no one can deny that the current price of Bitcoin is alluring enough to fall for it. The only question is, is this the right time to dive into, or one should wait as the Ukrain-Russia-US crisis would further strain the market?
Whatever be the case, we leave you with one famous quote from Winston Churchill “Never let a good crisis go waste”!