Bitcoin has taken another turn for the worse. Over the weekend, the currency was trading in the $6,900 range, but now it’s fallen even further to $6,700. So, what could be the big problem? What’s got bitcoin turning sideways while it sleeps?
Bitcoin Loses Another $200
It’s hard to pinpoint exactly what’s going on with the price considering so many crypto and financial experts say that people are returning to bitcoin and purchasing new assets for their digital coin stashes. Right now, as the world throws money left and right to all its citizens and residents, people are beginning to turn away from fiat and are looking to BTC to make their financial dreams come true.
A big example comes in the form of the $2 trillion stimulus package approved in late March by both Congress and President Donald Trump. The package is designed to aid people and businesses alike during these tough, economic times as the coronavirus continues to make its way across the globe.
Among the big staples of the package are $1,200 stimulus checks for individuals, while businesses will gain access to billions in new relief aid including deferred interest and deferred payment loans.
And yet, despite all this, many analysts say bitcoin is earning a top spot with investors. Danny Deng – leading member of the China Blockchain Application Center – explained in an interview:
The non-stop quantitative easing process will finally impact the mid-term and long-term market. Bitcoin is designed for this kind of situation, so I’m optimistic about bitcoin’s future.
Gleb Kostarev – head of operations in Russia – offers a similar sentiment. He claims that peoples’ interest in bitcoin has grown heavily over the past two weeks given that the ruble, Russia’s native currency, has floundered and suffered from inflation. He states:
We see that interest in cryptocurrencies has grown significantly in Russia… due to the economic situation in the country. The ruble has tumbled a lot in 2020. In addition, authorities are introducing a new tax on income from bank deposits from next year, which encourages people to withdraw funds from banks.
But if this is the case, if bitcoin is truly earing newfound respect amongst those looking to diversity and solidify their wealth, why is the currency continually dropping?
Why the Sudden Fall?
Bitcoin was above $7,000 just a few days ago. Trading at $7,300, it had recovered a huge chunk of its mid-March losses, when it was trading for a measly and embarrassing $3,800. The currency added approximately $3,500 to its overall price, meaning it had virtually doubled its value in relatively short time, and those words could be the clincher.
Is it possible that bitcoin gained too much too quickly? We’ve seen this before, as in 2017, when BTC surges too fast, it’s capable of losing quite a bit rather suddenly.