Bitcoin’s precipitous drop from last month’s high of US$64K to US$30K last week, represents about a 50% drop from peak to trough.
The last time such a steep drop occur is during the onset of last year’s pandemic – March 2020. Back then, the entire financial market was in liquidation mode. Crypto was not spared the carnage. However, owing to quantitative easing in a bid to spur the world’s economy, Bitcoin came to attention as the anti-deflationary asset. This has led Bitcoin to break the $20,000 level in Dec 2020 and on to an ATH of $64K in April 2021.
It seems many were hoping the party to continue. ATH after ATH continued to feed the crypto frenzy and draw millions of new retail traders onto the crypto bus. Surely, there must be a huge correction to bring us back to at least the halfway advance line.
True enough, the downward journey started on April 18 when a flash crash brought a foreboding overcast to the crypto market and led to a larger than normal correction for the next one month.
While many aims to point the blame on Elon Musk, or the “green energy” theory, or whatever, the fact is that what has gone up rapidly must surely be corrected substantially.
So, is the sell-off over? We never know. But, if you are a true believer that crypto will stay (as it had for the last decade), hunker down for this storm will soon pass.