The Recovery of Bitcoin to its Former Glory is Uncertain
No one could have expected the tremendous reception that Bitcoin would get when it made its first appearance in 2009. However, it became so popular that it gained the label of King of Cryptocurrencies. Thus, it has only gone from strength to strength over the years. True, it has also been a victim of marketplace volatility, like other digital currencies have. Regardless, it has always managed to bounce back.
Currently, however, there is some uncertainty about its performance. It is because investors have resumed impulsive selling of digital currencies, after a lull in such activities. The current wave of liquidation is the culprit, causing panic all around. Bitcoin has not remained unaffected. Its value is approaching $15,500.
The Conflict Between FTX and Binance
Investors have become apprehensive about the staying power of the cryptocurrency industry. The reason is the confrontation between FTX and Binance. They are the largest cryptocurrency exchanges in the virtual currencies industry.
Therefore, users, especially long-term investors, are wondering if other digital currency exchanges might face various issues, too. After all, 2022 has not been a healthy year for the world of cryptocurrencies. There is always the question of the rebound effect.
Confidence has been further undermined, due to the FTX exchange filing for bankruptcy. It had no choice since it was confronting liquidity issues. The CEO of the company declared that it had no funds to meet withdrawal requests. It needed around $8 billion in funding.
Rumors flew around about Binance offering to purchase FTX. However, there has been no action in this direction, yet. Therefore, investors and traders are striving to lessen their exposure to the world of cryptocurrencies. They are getting rid of their tokens by selling them at lower-than-marketplace prices.
Bitcoin’s Plunging Value
Investors are not feeling too happy about Bitcoin’s pricing. Even $20,000 did not suffice to act as a healthy support level. Within just four days, Bitcoin’s value dropped by 27%. It indicates a lack of interest in purchasing the coin. After all, the pricing proved to be much lower than the previously lowered price witnessed on June 18, 2022.
It has not helped that Binance abandoned its deal with FTX. Similarly, FTX’s collapse has made everyone jittery. FTX runs its business in the U.S., too, along with operating in other countries. Thanks to its collapse, investors are unable to withdraw their funds. This may cause regulators to initiate an investigation. This event, and compulsive selling, is bound to drastically reduce the value of cryptocurrencies, including Bitcoin.
Uncertainty of Outcome
Both, fundamental analysis, and technical analysis are in consensus about one aspect. The pressure on selling digital currencies, whatever the pricing, is going to be persistent. In other words, the current scenario is going to continue.
The bearish trend has not gone away, as evinced by the price chart of Bitcoin. The break that has surfaced below the June low, suffices as confirmation. Experts believe that there is hardly any probability of a rebound. The chances of Bitcoin reaching its former value of $20,000, are slim.
Seasoned investors believe that Bitcoin’s weakness is bound to continue. If the values approach $13,000 and $15,000, purchasers might still be able to lend a balance to the order flow. However, these values must also be consistent. Even then, it is hardly likely that Bitcoin will move towards a higher value than it is at present.
Bitcoin will be able to regain its lost glory, only if it manages to achieve a price of $21,500. In turn, cryptocurrency enthusiasts will regain their confidence. After all, when Bitcoin suffers, the suffering carries over to other digital currencies too. Therefore, when things go well for the ‘gold’ of cryptocurrencies, they will go well for other coins/tokens too.
The structure of the pricing must change. It is vital for the crypto world. Thus far, it has been the arena which has been responsible for monetary losses and changes in mindsets. When the original sentiments regarding Bitcoin return, panic selling will also cease. Thus, the outcome of what is happening in the global marketplace remains vague. All that people can do is wait and watch!