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- Bitcoin saw the verge of its worst times when it suffered a 40% loss during the recent times.
- The worst parts reached to an extent where BTC was down by a range of 50% within a 24-hour duration. It led to a steep fall from $7000 to $3800.
Bitcoin saw the verge of its worst times when it suffered a 40% loss during the recent times. An event accounted as the second largest percentage collapse in a day after Mt. Gox meltdown, which marked as a preliminary event on the same line. The worst parts reached to an extent where BTC was down by a range of 50% within a 24-hour duration. It led to a steep fall from $7000 to $3800.
The fall impacted the market and its traders in different dimensions. Nearly $1 billion worth of Bitcoin positions reported having liquidated in this massive capitulation lower. This episode reminds many of the unfortunate drop in the BTC market in 2018. It suggests a high risk of recession.
The Probable reasons
This event has caused thoughts concerning the origin of the problem and the measures that need to adopt future changes and fluctuations. According to a statement provided by the CEO of Binance, Changpeng Zhao, the present incident is very much related to the panic selling activities of the greedy investors who tend to liquidate their assets as soon as possible. There are many parameters to such a situation. It includes the proportion of the types of investors in the market and their relative strength to buy or sell the crypto-asset. When the stock market gets hit, the tendency of such investors to sell the cryptocurrency within a short period increases.
A positive change expected sooner
On the other hand, though the crypto-market faces a bitter situation in the present instance, it is highly likely that cryptocurrencies such as Bitcoin will have a bright future ahead. According to reports, there exist several proofs suggesting that the Bitcoin Sector has started to show trends of deviation from the financial markets, a character projected by BTC based on its uncorrelated behavior.
Players from the financial market and crypto-markets have accompanied such a stand. Company Executive of Three Arrows Capital, Su Zhu commented that BTC could reach its all-time high points within a small duration. His analysis based on the fact that several emerging markets are now pricing insignificant risk of sovereign defaults.
He added that with currencies like the U.S dollar approaching the brink of inflation, turning back would not be a viable option, a trend accompanied by the bond market. Therefore in the light of the data mentioned above, an individual can conclude that the decentralized and disinflationary Bitcoin has a brighter future.
Adding on to the comments from the corporate players, the CEO of Bitwise Asset Management, Hunter Horsley, provided several evidentiary statements, which indicates that Bitcoins could very well outperform equities in the forthcoming times. It included Bitcoin’s deviation from conventional markets and its potential to attract billions of Dollars as investments shortly. He concluded that with the Central Banks of the country printing trillions of Dollars, inflation becomes an inevitable phenomenon that eventually favors the crypto-market.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
