Bitcoin’s extreme volatility has struck again. The world’s leading cryptocurrency experienced a major drop in price after India’s PM Narindra Mori announced plans for a new crypto bill that should be introduced to the parliament in the winter sessions. The bill should ban most ‘private cryptocurrencies’ with very few exceptions. With India being one of the biggest unregulated markets out there, some kind of price movement was expected.
The drop was felt around the world after Bitcoin dropped to nearly 20%, although it recovered quickly. Bitcoin has been struggling to get over $60,000 lately, and is now deep below that line.
Other altcoins have dropped too, although neither suffered such a sharp drop. At the moment of writing, Bitcoin is trading just over $56,600, which is a big drop from the price it had a few weeks ago.
Awaiting Further Details on India’s Plans
The plans to ban the majority of ‘private cryptocurrencies’ in India is supposed to be presented during the winter parliamentary sessions. Talks between the government and the Reserve Bank of India have been ongoing for a while. The ROI has never said a positive word about cryptos, now focusing on a digital currency of its own instead. It has the backing of the government, which will certainly spell bad news for India’s crypto traders.
India is one of Asia’s jewels when it comes to cryptos, with 15-20 million investors (est.). Most pour their money into Bitcoin, but other coins are popular as well. So far, the government has failed to introduce any kind of regulation for cryptocurrencies. The Reserve Bank of India has been warning Indian citizens about the risks of cryptos. When everyone least expected it, the government introduced plans to effectively ban cryptos, although we’ll wait and see what happens.
As soon as the news was announced, there was a sharp drop in numbers on the market. Bitcoin suffered the biggest blow after being unable to climb back over $60,000 in the past week. Those Bitcoin prices were the lowest in the past 6 weeks, with other factors contributing to the drop too.
No Single Catalyst
Crypto experts see no single catalyst as the reason behind the sharp price drops. Instead, there are several bullish factors that won’t necessarily harm Bitcoin’s price potential in the long run. In the past few weeks, there’s been movement from dormant Bitcoin wallets. Experts believe that the buy-sell pressure is getting to BTC, and affecting its price negatively.
Another major factor that has been pushing Bitcoin’s price down is the rising value of the US Dollar. A bit unexpectedly, the Dollar has been rising all throughout November. It’s strengthening its position against other fiat currencies and this has been going on throughout the year.
The DXY price index certainly has an impact on Bitcoin’s price, although the exact factors that push the price down are still a mystery. There’s been a negative correlation between the US Dollar and Bitcoin, and as USD rises in price and strengthens its position, Bitcoin’s price will drop. At least that’s the story so far, with many analysts still predicting that Bitcoin will jump up to $100,000 by the end of the year.