Despite being severely pegged back by adverse macroeconomic conditions and dwindling investor interest in risk assets, Bitcoin had managed to consolidate around the $30,000 (roughly Rs. 23.5 lakh) mark over the past few weeks. However, the price of the largest cryptocurrency by market capitalisation has now slipped below the psychologically important $30,000 (roughly Rs. 23.5 lakh) mark across global exchanges while Indian exchange CoinSwitch Kuber values BTC at $30,665 (roughly Rs. 24 lakh), down by 2.46 percent in the past 24 hours.
On global exchanges like CoinMarketCap, Coinbase, and Binance the price of Bitcoin stands at $29,108 (roughly Rs. 22.5 lakh) moving down by 2.50 percent in value over the past 24 hours. As per CoinGecko data, BTC’s value is along the same point where it stood last week, up by 1.1 percent week-to-day.
Ether also saw itself in the red after a rough day of trade midweek. At the time of publishing, Ether is valued at $2,074 (roughly Rs. 1.5 lakh) on CoinSwitch Kuber while values on global exchanges see the crypto’s price at $1957 (roughly Rs. 1.5 lakh), where the cryptocurrency has dropped 4 percent over the past 24 hours.
CoinGecko data reveals that the cryptocurrency’s value is still a sizeable 5.7 percent behind prices a week ago.
Gadgets 360’s cryptocurrency price tracker paints a sorry picture for the wider crypto market and altcoins specifically — as the global crypto market cap fell by 3.99 percent over the last day. Cardano, Polkadot, Avalanche, Polygon, Solana, Litecoin, Uniswap, and Chainlink all marked considerable losses.
Shiba Inu and Dogecoin have also lost value over the last day. Dogecoin is currently down to $0.08 (roughly Rs. 7) after dropping by 3.7 percent in value over the last 24 hours, while, Shiba Inu is valued at $0.000012 (roughly Rs. 0.000957), down by 4.87 percent over the past day.
Expect volatility ahead
Some analysts say bitcoin’s current range between $29,000 to $30,000 could be breached in coming weeks and the asset could become more volatile.
“We caution that this current reduction in volatility risks turning into an explosion in the near term, potentially setting off momentum for a few days or weeks,” said Alex Kuptsikevich, a market analyst at FxPro, in an email to CoinDesk.
“A formal break of consolidation beyond the previous local extremes, which are located at $30,200 and $29,300, in a sharp move would trigger a wave of liquidation of positions,” Kuptsikevich said. Liquidations typically cause sudden movement of prices as traders cover their positions to protect against losses.
Other observers say the range is part of consolidation in the broader market.
“Following the crypto industry-wide sell-off with the demise of the LUNA network last week, markets have entered a period of consolidation,” said Will Hamilton, a trader at crypto fund Trovio, in a note to CoinDesk.
“Rotation has continued within the stablecoin market as a further $1Bn in USDT redemptions has been absorbed by USDC and BUSD,” Hamilton said, suggesting traders are not entirely exiting the crypto market.
Why is Bitcoin struggling?
Bitcoin has fallen by more than 50% since its all-time high in November. The crypto fear and greed index continues to register “extreme fear,” and many experts predict that prices could still sink further.
In fairness, it isn’t only the cryptocurrency industry that’s suffering. Equity markets have had a hard time as well, for many of the same reasons. These include the ongoing Russia-Ukraine crisis, high inflation, worldwide fears of a recession, and an increasingly hawkish Federal Reserve. It looks like the Fed will continue to aggressively raise rates in June and July, which is one reason Bitcoin is having trouble keeping its head above the $30,000 mark.
Bitcoin’s also been impacted by the collapse of the Terra (LUNA) ecosystem. The way that a top crypto disintegrated in a matter of days has hit confidence in the entire industry. We also don’t know what shape increased crypto regulation will take, and whether it will be harsher as a result of the Terra debacle.
However, there is some positive news. Analysts at J.P. Morgan said there’s “significant upside potential” in Bitcoin and said crypto is now one of its preferred alternative assets, overtaking real estate.
Should you buy?
The decision to buy crypto depends as much on your financial situation as it does on your long-term view. If you don’t have an emergency fund that can cover three to six months’ worth of living expenses or are behind on your retirement savings, focus on these goals first. Getting your financial bases covered is more important than any high-risk investment like crypto.