You might be wondering why did bitcoin drop? or why is bitcoin falling? The short answer is simply because of supply and demand. The price goes of Bitcoin goes up when demand for it increases and drops when it decreases.
Rumors about the regulation of digital assets in the U.S. and changes in Fed policy probably contributed to the recent decline in the bitcoin price. Since they don’t know what aspects will be implemented, traders have decided to sell their Bitcoin, decreasing its demand. As a result, the price dropped from its all-time high of over $68,000 in November 2021 to as low as $35,00—a. The price of Bitcoin is currently at $41,452.42, which is almost 41% lower than its value in November.
This raises the question,
Why Does Bitcoin Keep Dropping?
The value of bitcoin dropping to crypto enthusiasts is like another day in the office, and it is nothing new. However, it’s another time since its creation in 2009 that bitcoin has dropped by half from its all-time high. A good example is when Bitcoin fell below $30,000 in July 2021 after China cracked down on digital currency mining.
Surging inflation and new regulatory actions by the US government, including Biden’s recent executive order, have all contributed to recent price fluctuations. It doesn’t take much in an industry as new and speculative as cryptocurrency to be driven by large price swings. Also, new short-term investors who are selling their assets in response to the recent drop may be contributing to the decline in Bitcoin’s value.
Why Is the Price of Bitcoin and Other Cryptocurrencies Falling?
Bitcoin is not the only crypto decreasing in value. The value of the Altcoins in the market is also falling. In addition, Ethereum took a major hit, and other popular cryptocurrencies like Avalanche, Dogecoin, and Cardano dropped more than 10% of their value.
Crypto asset is highly volatile and with the series of events that are occurring, which includes
- The U.S. threats to future regulation of cryptocurrency investments.
- Uncertainty about rising interest rates in the United States and the United Kingdom.
- The Chinese government’s crackdown on cryptocurrency, labeling it an illegal transaction.
- The suggestions that Russia may prohibit cryptocurrency trading and mining.
- The geopolitical situations are going on in the world right now.
Many investors sell off their risky assets—cryptocurrencies out of fear, uncertainty, and doubt (FUD).
When Will Bitcoin Price Drop End?
The questions on everyone’s mind are: will the market recover from the drop, and is it a good time to purchase? The answers to these questions are not clear. There are various points of view, so it is best to wait and see.
Will Bitcoin Continue to Drop?
It is difficult to predict if the price of Bitcoin will continue to drop. Many experts claim the price may continue to fall till April. But no one can determine what will happen after that.
The price a week ago—the 14th of March—was $39,000, and the price today is $41,000, which is a 6% increase within 7 days. But this does not mean that the price can not fall after maintaining an upward trend; that is how unpredictable the crypto market is.
#Do You Still Want to Buy Bitcoin Even With the Price Drop? If you are looking to buy the dip, put in mind that the dip can also dip since the market is very speculative. So do not invest solely out of a fear of missing out. Before you get buy that cryptocurrency, understand that:
- You should only invest what you’re willing to lose.
- If you lose your investment due to volatility, it is solely on you. You cannot hold anyone responsible.
- You shouldn’t make investment decisions based on market sentiments but rather after thorough research and understanding what you are getting yourself into.
It is essential to understand a coin’s entry point. If you don’t know when buying a coin, you might be helping others pump it while the loss is dumped on you.
If this extreme drop bothers you, you may have too much riding on your crypto investments. Instead, invest what you can afford to lose. Stay up to date on what is happening in the crypto market.