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- Bitcoin crypto crash has been observed in the recent cryptocurrency market
- Few factors have caused the plunge in prices of the market
- BTC was directly proportional to Gold and is now seems to be getting inversely proportional
- The performance of the emerging asset class has left retail investors concerning
Bitcoin has performed tremendously since it attracted the attention of institutional investors. Last year MicroStrategy, a business intelligence service provider, was the first to jump in the BTC wagon. Since then, the coin designed by Satoshi Nakamoto has faced mainstream adoption globally. In mid-April, the flagship crypto coin had achieved a new all-time high near the price level of $64k.
However, currently, the cryptosphere is witnessing the Bitcoin crypto crash. The price of BTC has plunged by more than 50% since its last ATH, and it is known that several factors have caused such a bearish market.
Bitcoin crypto crash caused by different factors
Observing Bitcoin attracting mainstream adoption, governments globally began to strict regulations on crypto assets. Countries like India and Nigeria have imposed a ban on the usage of such investments. At press time, the cryptosphere faces a Bitcoin crypto crash, and the asset is trading at the price level of $33,847. However, it is observed that there are two main reasons behind the crash. The first is China’s imposing of the ban on crypto assets, and the other is the price dump made by Elon Musk. Hence, the main issue is caused by Elon Musk, which was unexpected.
Chinese regulation has affected the BTC market
China has remained a dominating country in terms of crypto assets since the establishment of Bitcoin. It is known that the country was dominating more than 30-35% of the crypto mining industry globally. Recently, China being an important region for the BTC on the market, has announced a ban on financial institutions and payment firms from providing services related to crypto transactions. Moreover, the country warned investors against trading such speculative assets.
Elon Musk effect on the crypto market
Elon Musk, the CEO of Tesla and SpaceX, remained a great advocate of cryptocurrency in recent days. Musk also invested in Bitcoin and created great hype among his millions of followers. Also, Musk began to accept BTC in exchange for products and services from Tesla. However, no one has thought that Musk would ever dump the prices in the market. Recently, Musk announced that BTC uses fossil fuel for the mining process, and he cannot support such an asset that impacts environmental impact. And the statement became a significant reason behind the Bitcoin crypto crash.
BTC is directly or inversely proportional to Gold?
When Bitcoin began its bullish cycle observing the scenario, many in the cryptosphere considered that BTC is directly proportional to Gold. Traditional Gold is known as the safest haven for investments. According to a few experts in the cryptosphere, a shift from precious metals is what is needed for BTC to achieve a price level of $100k. However, now it concerns whether BTC is directly proportional to the traditional Gold. Where the price of Gold is continuing its uptrend, the cost of BTC has begun a downtrend.
Retail investors are stuck at a concerning point
Institutional investors and whales have played amazing trade games and enjoyed a lot of profits. Now the concerning factor is whether the retail investors are trapped or they have an opportunity. Trading is all about purchasing at lower prices and selling at higher. However, it seems that now is the time for retail investors to buy. However, there is still skepticism regarding when the price will begin its next bullish run.
After the 2017 bullish run in 2018, the crypto sphere witnessed a heavy crash in prices. However, in 2020 the uptrend began, and this time it was known that the rally was entirely different from 2017’s. Still, the trend remained the same as 2017’s rally, and now the market is crashing. Following the scenario, the primary concern is whether the rally will be observed again in 2025 or this time it’s a plunge that would take the price of BTC to achieve the level of $100k shortly.
Bitcoin At Technical Parameters and Charts
Bitcoin price over the yearly chart dropped below major moving or vital moving averages of 100 and 200-DMA for the first time in the year 2021. Crypto king witnessed a massive selloff after a robust bullish rally from $8000. While the selling volume also increases sharply, which is extraordinary volume traction. While the bulls have only rigid supports at $28,500 and $21,000, whereas resistance at $45,000 and $52,000. Moreover, Bitcoin also witnesses pullback from lower levels, but the strength of bulls is not powerful then bears. No buying or selling is suggesting at current market conditions, and after absorbing all selloffs, one can see good entry.
Support levels: $28,500 and $21,000
Resistance levels: $45,000 and $52,000
BTC Dominance: 42.3%
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
