- In a time span of just 24 hours, the BTC fall has accounted for a $6,000 decline
- JPMC had seen this coming and are predicting more declines in the prices of BTC
- BTC is presently facing the problem of what is called the ‘liquidity crisis’.
In the recent data revelations, the BTC fall accounted for a $6,000 decline bringing the price levels around $46800 at the lowest in just a span of 24 hours. With this whooping fall, the analysts at JPMC predict that the decline is due to the illiquidity of BTC assets in the market, and that more such situations might arise in future. Bitcoin is presently facing what is called the – ‘liquidity crisis’.
Strategists claim that if the liquidity rate remains lower then very soon BTC Fall might take place. With the primary readings, the currency had reached an all-time high price value of $58,400 which was later reanalysed and it dipped to 54,000. This is nearly a $4,000 dip in the prices of BTC. It fell like a huge blow on the crypto blockchain.
In recent days the currency was soaring higher and higher in the scoreboard with no one even halfway near them. If we refer to the basic economic theory, then if the demand stays very high in a market but the supply falls, then the prices are expected to rise.
JPMC’s take on the decline of BTC prices
When the issue was brought forward by the multinational company of JPMorgan Chase & Co, their expert analysts revealed that this was a very much predictable outcome. The market was not unknown of the fact that Bitcoin was facing a crisis in terms of liquidity and that became the root cause behind the steep fall in the currencies prices in a span of just 24 hours.
Although we have witnessed giant market bulls like Tesla and MicroStrategy buying the assets of BTC along with other institutional investors, as we know that there was a decline in the production of new tokens by the BTC blockchain in 2020, which fell to three times its normal token generation rate. With all these dynamic purchases and constant volatility, such an outcome was much expected as well as predicted for the Bitcoin blockchain.
Future problems that BTC is predicted to be facing
One of the JPMC strategists wrote in an article that the rate and level of liquidity taking place in the Bitcoin blockchain is several times lower than even the liquidity rates of S&P 500 and Gold, which seems to be a situation of tension among the BTC providers. All these conclude that even if a very small or insignificant amount of transaction or exchange takes place in the crypto it would very significantly affect the prices of BTC, be it buying or selling.
However, it’s not unknown to us that BTC was facing such a liquidity crisis for a significantly long time, but was overshadowed by the fact that developments with such motives are basically for long term benefits as far as assets are considered.
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