After temporarily dropping below $40,000 in the early hours of Wednesday for the first time in six weeks, the value of Bitcoin (BTC) has recovered and stabilized above $42,000 in the last few hours.
The price of Bitcoin has not yet rebounded to pre-Monday levels of $47,000, but it has slowed its downward spiral nonetheless as buyers pounced on the Bitcoin “sale” below $40,00, sending the price back above $42,000.
Prominent crypto analyst Michaël van de Poppe believes that there was no significant reversal when prices climbed from $28,000 to $52,000. Therefore, Bitcoin is correcting itself by 25% in September, which is typically a corrective month.
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Currently, BTC is trading at $42,448, down 2.05% in the last 24 hours and down 9.93% over the previous seven days, according to CoinmarketCap.com.
Evergrande causing uncertainty in the market
According to some analysts, the Bitcoin flash collapse, which wiped away over $200 million from the cryptocurrency market on Monday, was caused by worries about Evergrande Group’s ability to make debt payments.
Fears have quickly swept through global markets, with ramifications affecting the entire financial system, including the crypto market.
Due to concerns that the Chinese group might default on its debt obligations, the property developer has said it would make a coupon payment on its domestic bonds on September 23.
Senior market analyst of the Americas at Oanda, Edward Moya, stated on Monday that Bitcoin was no different from other assets:
“The fallout from the Evergrande is putting a tremendous dent in risk appetite that is sending everything lower <..> So it should not surprise Wall Street they are the first asset sold at the beginning of China-driven market selloff.”
Bitcoin price insignificant “in the long run”
Indeed, the recent losses indicate that this week’s drop is not over yet, and by the time this slump is complete, there may be many significant price marks to reclaim.
Nevertheless, one of the most ardent supporters of Bitcoin recently claimed that the recent price swings are meaningless in light of Bitcoin’s long-term potential.
CEO of MicroStrategy, Michael Saylor, has led his business to become the world’s largest corporate investor in Bitcoin. Saylor stated on Twitter that the price this week or last week wouldn’t matter “in the long run” since it will both be a tiny percentage of its final worth.
Last Monday, the company added another $250 million in bitcoin to its overall assets, bringing them to almost $5 billion.
Crypto analyst perspective
An interesting feature of the most recent Bitcoin price drop is that it aligns perfectly with a wildly optimistic price forecast model.
More than 800,000 Twitter followers have been amassed by anonymous analyst PlanB, primarily because of the foresight of his Stock-to-Flow (S2F) model, which he initially applied to the cryptocurrency in 2019 when the price was around $4,000.
The prediction, which considers Bitcoin’s inherent scarcity, puts it on the road well beyond $100,000 in the current market cycle, but each price drop raises new concerns.
In April, Bitcoin’s price hit an all-time high of over $64,000 before plummeting drastically. As a result, PlanB estimated that Bitcoin might reach a price of around $100,000 by the end of 2021.
The global crypto market
The global crypto market cap is $1.88 trillion, a 2.14% decrease over the last day. In addition, the total crypto market volume in the previous 24 hours is $136.41 billion, which makes an 8.00% decrease. The entire volume of DeFi is presently at $18.09 billion, which is 13.26% of the total 24-hour volume of the crypto market.
Meanwhile, other cryptocurrencies are tumbling, too. In particular, Ethereum (ETH) fell below the $3,000 mark after holding on for almost a day; currently, ETH is changing hands at $2930, down 4.87% in the last 24 hours.
Elsewhere, Cardano (ADA) is also on the verge of slipping below the $2 level, while Dogecoin (DOGE) is hovering perilously near to the $0.20 threshold.
Since the whole crypto market is down by roughly 2% from yesterday’s value, the charts are still primarily red, with very faint indications of a rebound to levels seen before Monday.
[coinbase]
