Is the Bitcoin Bubble bursting? What’s happening to the cryptocurrency market? Could Bitcoin’s 20% plunge be a warning signal according to financial advisors and analysts?
In less than two weeks, Bitcoin plunged almost 20 percent, approaching bear market territory.
A day earlier, the crypto had been down more than 5 percent, and was last seen traded at about $56,600 per coin, about 18 percent below its peak of $69,000 reached earlier this month.
In addition to bitcoin, other cryptocurrencies have suffered a similar drop of almost 15 percent. Ether, the native crypto of the Ethereum network and the second largest crypto, has similarly fallen from its peak of almost $4,800.
As of last night, the digital currency was trading at $4,125 per coin, a decrease of more than 2.5 percent over the past 24 hours.
The prices of smaller tokens, like Binance coin, solana and cardano, were also down over the past day, falling anywhere from 19 percent to 24 percent from the highs seen earlier this month.
Investing in crypto has become a very volatile business for seasoned crypto investors.
Having reached a record high in spring, bitcoin plunged more than 50 percent during the summer, only to rally back and set a new record.
Early this decade, bitcoin was still a relatively niche project with fewer holders, so the crypto saw even bigger price swings.
Jamie Cox, a financial adviser and managing partner at Harris Financial Group, told Bloomberg that when interest rates rose and liquidity was drying up, cryptocurrency had trouble surviving.
Speculators and investors often refer to periods of enormous price drops as “winter,” which follows rapid price increases that lift prices to record levels. One such winter happened in 2017 after bitcoin rallied from $900 to a then-record $20,000.
“Bitcoin correction is not a major issue,” Craig Erlam, senior market analyst for foreign exchange Oanda, told Bloomberg.
Breaking $50,000 would represent a large correction from the highs, but it would still be relatively minor compared to how far it has come in recent months.
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