A lot of crypto investors are panicking right now over the insane price drop of cryptocurrencies. To be fair, this is one of the most dramatic dips that have happened in a long time. Last year, we had Bitcoin got all the way up to $126,210. Such an all time high.
As of the time of writing, it's sitting at 66,689.53 USD, more of a 50 percent drop.
abcNews as source for Bitcoin all time high at 126K
There is more than one reason why we're seeing this happen. Wall Street started to sell and had a lot of crypto to cash. This led to a huge panic sell off. The mining companies are really having a hard time staying profitable right now too. Many of them have started to sell their Bitcoin just to hang on or change to AI investments. And China has banned some of the coins again this month. They banned the Yuan linked stablecoins, unauthorized real world asset (RWA) tokens, and offshore crypto services targeting mainland users. Human behavior is what determines the market prices so it's not good to have too many people being nervous about holding on to their investments.
Source for China crypto Ban news
I was thinking from a short term perspective and had to change that to realize the difference. If you're thinking from a short term perspective, the prices have been either stable or going down. There's still a whole lot of leverage in the system. If prices go down a little more, sell stop orders could trigger another panic sell off. I spoke to an experienced investor and he believes that Bitcoin will likely settle in the $60K range, then eventually move back to $100K after everything settles down.
The situation that happened is called a liquidity event, the sell off happened due to an entire group of players needing cash for another investment area. They dumped their crypto very quickly, creating a rapid decline in the market, which many will tell you is an over sold market. But if you look at the history of crypto market price, the data will tell you there usually is a major correction of the market, which is followed by a long consolidation period before it climbs again. I can't tell you exactly what will happen for sure, for the most part I'm just watching the whole market anxiously waiting for a positive change.
But if you're thinking long term, and have invested in a solid coin, you're most likely safe.
