BackBitcoin nosedives below $28k. Has the crypto leader lost shine for investment?
The global crypto market cap was around $1.1 trillion due to a huge correction in the valuation of heavyweight Bitcoin. The bears in the crypto market come after US inflation hits a fresh 40-year high.
PremiumThe Crypto market was bleeding on Sunday with Bitcoin nosediving steeply below $28,000. Counterpart Ethereum as well sharply tumbled adding to the woes. The global crypto market cap was around $1.1 trillion due to a huge correction in the valuation of heavyweight Bitcoin. The bears in the crypto market come after US inflation hits a fresh 40-year high.
Currently, Bitcoin is traded at $27,454.31 down by 4.96%. Following this, the coin's market cap dived to near $523.28 billion. Despite the steep drop, Bitcoin's dominance was not affected instead it rose. This digital coin is the leader of the crypto market with dominance at 47.48% rising by 0.43% over the day.
In a single day, Bitcoin's price has dropped by more than $1,670. The coin has touched an intraday high and low of $28,938.19 and $27,266.28 respectively.
Meanwhile, its counterpart Ethereum plummeted nearly 8% and was trading around $1,460. The second-largest cryptocurrency has a market cap of around $177.45 billion.
As per CoinMarketCap, the global crypto market cap dived 5.9% to around $1.1 trillion over the last day. Its total crypto market volume, however, rose by 20.46% to $85.16 billion over the last 24 hours. Meanwhile, the total volume in DeFi is currently $6.87 billion - 8.07% of the total crypto market 24-hour volume. The volume of all stable coins is now $73.31 billion which is 86.09% of the total crypto market 24-hour volume.
Notably, Bitcoin's weekly drop is more than 7%, while Ether slipped nearly 18% in the last seven days.
As Bitcoin traded in deep red, investors wonder where the cryptocurrency is headed. Crypto experts believe Bitcoin is not bottoming out. The current bloodbath is seen as a buying opportunity in Bitcoin to hedge funds against multi-year high inflation.
Crypto Rover, a cryptocurrency enthusiast, through his Twitter account stated that Bitcoin will never hit $20,000. He keeps a long position on Bitcoin. He added, "Bitcoin always reverses once you least expect it."
The enthusiast said, "Bitcoin needs to close above $28.2k to remain in the falling wedge."
Meanwhile, Dennis Porter CEO & Founder of Satoshi Act Fund, and also Executive Producer at Compass Mining, through his Twitter account said, "If you have a 10-year mindset on Bitcoin, the price drops make you happy. If you are worried about short term gains, the drops terrify you," adding, "Zoom out, lower your time preference, and learn to appreciate these buying opportunities."
The latest steep breakdown in Bitcoin is not a new scenario. The downside of the cryptocurrency can be nerve-wracking for any investor, however, the historic data shows that Bitcoin has made strong long-term gains. The selloff is like bubbles bursting the cryptocurrency at a huge margin and bringing in fresh corrections before the crypto picks up position for a bull run.
In the last five years, Bitcoin prices have made a significant jump.
Data on CoinMarketCap data showed that by end of June 2017, Bitcoin was around $2,550 and further more than doubled to the $6404 level by end of June 2018. A year later in June, the cryptocurrency reached near the $12,000-mark. Then came the period of massive bears as the first wave of the Coronavirus pandemic hit the world in 2020. Bitcoin corrected steeply to near $9,050 by June 2020 end. Notably, the cryptocurrency picked up momentum in 2021 which was the year of the boom as many market instruments witnessed new lifetime highs. By end of June 2021, Bitcoin was over the $35,000-mark, but in the same year, in November, the digital currency clocked its lifetime high of 68,789.63 before taking a downward slope.
If taken into consideration the current mentioned trading price, then Bitcoin has skyrocketed by a whopping nearly 952% in the past five years (from June 2017 to date). On June 12, 2017, Bitcoin was near the $2,610 level, data on CoinMarketCap showed.
Cryptocurrency markets have been volatile since the start of 2022 as inflation pressures intensified forcing major central banks to tighten monetary policy. Currently, global economies are battling with multi-decadal high inflation, lackluster growth, persisting geopolitical tensions and sanctions, elevated prices of crude oil and other commodities, and lingering COVID-19-related supply chain bottlenecks.
Micheal Saylor, Founder & CEO at MicroStrategy, said, "Bitcoin is money. Everything else is credit."
In an interview with CNBC World last week, Saylor said, "If Bitcoin is not going to zero then it's going to a million." Saylor spoke about the new crypto bill proposed on June 7 by two U.S. senators—Kirsten Gillibrand and Cynthia Lummis.
When asked if he sees Bitcoin coming down considerably and not ever reaching any kind of particular high, Saylor said, "We don't see it that way, we actually see it the opposite." Saylor believes Bitcoin is better than gold. He added, "Bitcoin is, like it or not, unique. There really is no network in the world, that has its level of adoption or its level of security."
Saylor is very bullish on Bitcoin. As of March 31, 2022, MicroStrategy held 129,000 in Bitcoin.
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