With Bitcoin’s recent major dip to $30,000, the rumor that the bull run is over has spread like wildfire throughout the crypto world.
If you have invested in cryptocurrency, you are probably worried about what to expect next.
Is the Bitcoin bull run really over? Or are we going to see another all-time high soon?
This article will help you understand what to consider if you are invested in crypto. Let’s get started!
Main reasons behind the dip
Crashing as much as 30% within 24 hours, Bitcoin has been on a downward trend. But the big correction had multiple reasons.
Elon Musk’s tweet was one of the reasons behind the dip. The famous billionaire has a significant influence on the crypto-verse and has been supporting ‘DOGE.’ His interest in cryptocurrency has brought millions of people to invest in cryptocurrency, and his tweets have a major impact on the prices of cryptocurrencies.
On May 13, Elon Musk’s tweet stating Tesla has suspended vehicle purchases using Bitcoin due to environmental concerns brought great tension in the market. Rumors of Tesla selling its Bitcoin created panic throughout, making people panic sell. Almost $300 billion was wiped off the entire cryptocurrency market after the tweet.
To add to this panic, China barred financial institutions and payment companies from carrying out any cryptocurrency transactions. The China ban brought a wave of fear, uncertainty, and doubt, resulting in high selling pressure.
Bitcoin exchanges like Independent Reserve saw massive sell orders, with other cryptocurrencies plunging with Bitcoin pricing going down.
What are famous people doing?
While an almost 40% drop in the price of Bitcoin from its all-time high seems dramatic, it is common in many volatile markets. After such a huge rally, Bitcoin has seen a major 40% correction in the past, so this is nothing new.
Michael Saylor, CEO of MicroStrategy and the face of Bitcoin, stated that “I’m not selling.” In fact, MicroStrategy purchased an additional 229 Bitcoins for $10 million.
Michael Saylor tweeted that entities he controls have 111,000 Bitcoins in their possession. His actions are a clear indication that the bull run might not be over yet.
One of the biggest crypto channels named BitBoy Crypto also highlighted that this might be a short-term correction. Many YouYube influencers have been calling this dip mere ‘manipulation by hedge funds.’
Are you wondering what they are doing? They are holding!
Elon Musk’s tweets highlighted that Tesla has diamond hands and is not selling any Bitcoin at all.
Technical analysis of Bitcoin
Bitcoin has been fluctuating between the price range of $30,000 and $42,000. Strong resistance at $42,000 is evident, with support lying around $30,000.
For Bitcoin to see an upward trend, the price has to break and close above $42,000. The next resistance can be seen at $47,000 and $51,000.
Dipping down below $30,000 can be a clear sign of weakness. It can lead to further panic in the crypto market and more selling by retail investors.
What to consider if you are invested?
The cryptocurrency market is highly volatile, and such corrections are regular. However, you need to manage risk accordingly. Long-term investors are calling it an opportunity to add cryptocurrency at a discounted price.
Investing what you can afford to lose is the major advice every experienced trader gives out.
If you are already at a loss, holding onto your cryptocurrency till the market stabilizes can be one way to go about it. Or you can cut more potential losses by selling your cryptocurrency at this loss. You need to know about your exit strategy and decide when to exit or enter the market.
It all depends on your risk appetite. If you can hold till the market sees an upward trend again, you can reap the rewards.
Has the bull run ended?
Whether the bull run has ended or not remains uncertain. The market is unstable and in a critical period.
We don’t know when these time frames formally began because many observers, particularly those who entered the market early, have different viewpoints. Furthermore, we have no idea what the peak will be during this period or when it will occur.
You should listen to both views and come up with your own conclusions since simply embracing FUD or hype may not be a good idea!