After a bright month with new heights, Bitcoin (BTC) and most cryptos are finally descending into a bearish market for now. The price of the first cryptocurrency has lost around 16% during the last 24h, while the total market capitalization for all cryptos suffered a 15% blow in the same period, according to CoinMarketCap.
Besides, just like in other opportunities, the bearish percentages for Bitcoin are affecting the whole market. Prominent altcoins have lost some value as well. During the last day, Ethereum (ETH) price went down by around 18%; XRP lost 17%, Cardano (ADA) lost 22%, Bitcoin Cash (BCH) lost 12%, Litecoin (LTC) lost 14%, and Chainlink (LINK) lowed by 19%.
According to the Fear & Greed Index by the crypto firm Alternative.me, the market just passed from an “Extreme Greed” state last week, to “Fear” today. They calculate this index considering volatility, social media engagement, market dominance, and Google Trends to sketch the general view by the investors regarding cryptocurrencies.
Why we went from “Extreme Greed” to “Fear” now is more or less uncertain. The investment bank JP Morgan Chase published a new report in which they consider Bitcoin the “least reliable hedge during periods of acute market stress”.
Additionally, this same week the President Joe Biden’s Treasury Secretary nominee, Janet Yellen, suggested to the lawmakers to “curtail” the use of cryptocurrencies since they might be used for crimes. Other theories about the Bitcoin and cryptos bearish market suggest a simple price correction and profit-taking by investors.
Buying the dip in bearish times
The recent fall in the prices might have scared some investors, but others are taking advantage to buy the dip. One of them is probably the investment firm BlackRock, (often called the “world’s largest shadow bank”). Some recent filings to the U.S. Securities and Exchange Commission (SEC) confirmed their plans on investing in Bitcoin soon.
Specifically, they’d have plans to make Bitcoin derivatives. According to the filing:
“Each Fund may use instruments referred to as derivatives, which are financial instruments that derive their value from one or more securities, commodities (such as gold or oil), currencies (including Bitcoin)”.
On the other hand, barely a couple of days before, Grayscale Investment added even more BTC to their tenures. Now, they’re holding around $23b in their Bitcoin Trust fund. After the panic subsides, the retail investors could give some fresh impulse to the price. However, break the $40,000 presents itself as a difficult target for now.
Featured Image by Charles Thompson / Pixabay