Bitcoin Dips To $64k After Record High Forbes Advisor INDIA – Forbes

The worlds largest cryptocurrency, Bitcoin (BTC), has witnessed a downturn in the last two days. As of March 20, 2024, it is trading at $64,018.90, with a market capitalization of $1.20 trillion. Bitcoin had been hovering around the $70,000 level on March 12 but surged later, surpassing its previous all-time highs. On March 14, 2024, it set a new record of $73,750, with a market capitalization reaching $1.44 trillion.

The cryptocurrencys Fear and Greed Index shifted into the zone of greed, after being in a state of extreme greed for an extended period. Bitcoin prices soared to $73,750, establishing a new all-time high and surpassing previous peaks in the second week of the month. However, Bitcoin has since retreated below the $65,000 level owing to several speculated factors that may have contributed to the decline in prices.

Heres a deep dive into what may have caused Bitcoin to dip after a record high.

Featured Partners

Legacy

Over 1 Million Investors Trust Mudrex for Their Crypto Investments

Security

Mudrex is Indian Govt. recognized platform with 100% insured deposits stored in encrypted wallets

Fees

Enjoy zero crypto deposit fees and industry's best fee rates.

Please invest carefully, your capital is at risk

Bitcoin experienced significant growth in the early weeks of March 2024, with a 74% increase in value and a remarkable 90% rise from its post-exchange traded funds (ETF) flows. However, the recent sharp corrections, occurring multiple times within two weeks, suggest a potential slowing down of the strong uptrend seen since the latter part of 2023. While this situation does not necessarily indicate a bearish outlook, it does suggest a period of consolidation for the broader crypto market.

It was inevitable for Bitcoin to experience a fall after reaching a great high, as it aligns with a fundamental principle of financial markets: what goes up must come down. Throughout history, every significant surge in asset prices has been followed by a period of correction or consolidation.

Bitcoins volcanic rise, particularly in recent months, had led to mounting expectations of a pullback. This natural ebb and flow in market dynamics reflects the cyclical nature of investor sentiment and the tendency for markets to seek equilibrium. Therefore, the decline in Bitcoins price following a period of substantial growth was not unexpected but rather a predictable outcome in the broader context of market behavior.

Another significant reason could be profit taking. After experiencing significant price increases, investors often decide to sell their holdings to realize their profits. This is a natural behavior in financial markets, including cryptocurrency markets. When prices rise rapidly, investors may become concerned about a potential reversal or correction, prompting them to sell their assets to lock in gains. As more investors start selling, it can lead to increased selling pressure and downward price movements. Profit-taking can exacerbate price declines, especially if there is a lack of buying support to counterbalance the selling pressure.

Market manipulation may have contributed to Bitcoin dipping to $64k. Cryptocurrency markets, due to their relative youth and lack of regulation compared to traditional financial markets, are susceptible to manipulation. Large investors or groups of traders, often referred to as whales, can intentionally manipulate prices to their advantage.

One common manipulation tactic is the pump and dump scheme, where a group of investors artificially inflate the price of a cryptocurrency through coordinated buying, creating a buying frenzy among retail investors. Once the price reaches a peak, the manipulators sell off their holdings at a profit, causing the price to plummet and leaving other investors with losses. Market manipulation can lead to sudden and sharp price declines, as it creates artificial demand and distorts market dynamics.

Its important for investors to be aware of these factors and exercise caution when trading in volatile markets.

The recent surge in Bitcoin, reaching a new all-time high, initially indicated a bullish momentum toward set targets. However, a recent pullback has shifted investors perspectives. March witnessed bullish trading, driving Bitcoin prices above $73,000, with the market capitalization exceeding $1.35 trillion, indicating a strong uptrend.

The present Bitcoin chart illustrates the markets volatility alongside the potential it offers. The subsequent retreat indicates a significant resistance zone that investors or buyers have not yet convincingly overcome.

Parth Chaturvedi, investment lead at Coinswitch Ventures, says the recent decline in Bitcoin prices represents a healthy correction in its rally that can be attributed to macroeconomic factors, as cryptocurrency is not isolated from broader market trends. The unexpectedly high U.S. inflation figures have dampened expectations of a Federal Reserve interest rate cut in the near future, leading to a sell-off in risk-on assets such as US and Asian stocks, as well as cryptocurrencies.

The US Fed meeting begins March 19, 2024. While the market isnt expecting any changes or surprises in terms of rate adjustments, all attention remains focused on the Federal Open Market Committees (FOMC) decision on interest rates.

Rajagopal Menon, the vice president of WazirX, states that Bitcoins price is expected to fluctuate within the range of $62,700 to $68,900 for the next few days or even weeks, potentially extending into April, a period spanning more than three weeks.

Menon anticipates another surge in the near future as demand for Bitcoin increases and its supply diminishes due to the upcoming Bitcoin Halving event, which is likely to drive prices higher. Many analysts share a bullish sentiment during this time and advise investors to remain calm and consider buying during dips.

Read more: Bitcoin Price Prediction: Can Bitcoin Reach $1,000,000 by 2025?

Featured Partners

Legacy

Over 1 Million Investors Trust Mudrex for Their Crypto Investments

Security

Mudrex is Indian Govt. recognized platform with 100% insured deposits stored in encrypted wallets

Fees

Enjoy zero crypto deposit fees and industry's best fee rates.

Please invest carefully, your capital is at risk

Predicting the exact trajectory of Bitcoins price, including whether it will experience a steep fall, is inherently challenging due to the volatility and complexity of cryptocurrency markets.

The past week witnessed record-breaking inflows in the U.S. Spot Bitcoin ETFs worth $1.05 billion surpassing the previous record of $678.67 million. Given the substantial influx of capital, it appears that demand-side forces will drive Bitcoin prices higher. The recent rise in Bitcoins price may indeed attract new investors who previously missed the opportunity to buy at lower prices. This FOMO or fear-of-missing-out effect can drive further demand and contribute to upward price momentum in the short term.

Furthermore, the forthcoming Bitcoin Halving event, which will decrease mining rewards, will also create supply-side pressures conducive to bullish price action.

Edul Patel, chief executive officer and co-founder of Mudrex, believes amidst the correction in the cryptocurrency market, now is an opportune time to accumulate and systematically invest to mitigate risk and maximize long-term profits. Bitcoins immediate support level is at $61,500, with resistance at $68,500.

The Relative Strength Index (RSI), a technical analysis tool, indicates that Bitcoin is nearing oversold conditions. Typically, an oversold condition precedes a trend reversal, making it a favorable time to enter the market, says Patel.

While Bitcoins price may experience periods of volatility and speculative bubbles, the long-term sustainability of its value depends on various factors, including regulatory clarity, adoption as a store of value or medium of exchange, technological advancements, and market demand.

Historically, crypto assets have experienced significant drawdowns of 20% to 30% during bull runs before resuming their upward trajectory. Although there may be occasional instances of profit-taking leading to price dips, the overall momentum behind Bitcoin remains bullish.

Chaturvedi advises traders to exercise caution with leverage, as volatile price movements in either direction can lead to liquidations. The upcoming halving of miner rewards scheduled for April 20 is expected to trigger a substantial supply shock, potentially impacting Bitcoin prices significantly.

There is a commonly recorded phenomena in the cryptocurrency market, that is, when the price of Bitcoin experiences significant increases, it often leads to a broader surge in the prices of other cryptocurrencies, including Ethereum and various altcoins. Following are the reasons for this trend:

Market Sentiment: Positive sentiment towards Bitcoin can spill over to other cryptocurrencies, as investors view the entire market favorably during bullish periods. The belief that Bitcoins rise reflects growing interest and confidence in cryptocurrencies as a whole can lead investors to diversify their holdings into alternative assets within the crypto space.

Market Dynamics: Cryptocurrency markets are interconnected, with many investors and traders holding diversified portfolios of digital assets. When Bitcoins price rises, it can lead to increased trading activity and investment inflows into other cryptocurrencies, driving their prices higher as well.

FOMO Effect: Fear of missing out (FOMO) plays a significant role in investor behavior in the cryptocurrency market. As Bitcoins price climbs and garners media attention, investors who may have missed the initial opportunity to invest in Bitcoin may look to alternative cryptocurrencies that appear to offer similar potential for gains.

Technological Synergies: Many cryptocurrencies, including Ethereum, serve different purposes and have unique features compared to Bitcoin. Investors may see value in these alternative cryptocurrencies based on their technological innovations, use cases, or community support, leading to increased demand and higher prices. Speculative Trading: Cryptocurrency markets are known for their speculative nature, with investors seeking opportunities to profit from short-term price movements. When Bitcoins price rises sharply, traders may look for alternative cryptocurrencies with lower prices or perceived growth potential, driving up their prices through speculative trading activity.

Cloud Hosting

Bitcoin Dips To $64k After Record High Forbes Advisor INDIA – Forbes

Recent Posts

Categories

Archives

Media Sites

Pages

Site admin