After a month of price boosts, Bitcoin’s price had dropped dramatically once again. A few days ago, the price dropped sharply in the midst of a global equity markets decline. Investors began unloading their assets as a result, dropping the price even further. El Salvador’s BTC adoption as legal tender doesn’t help its case as well, as things haven’t been going as planned.
In the past 24 hours, Bitcoin fell under $43K for the first time since August, dragging the whole crypto market in the red with it.
Ether is down too, scaring potential new investors off. The latest price drops may change the narrative of Bitcoin being a safe haven asset, with people realizing that the price is even more volatile than they first thought. However, not everything is that bad. According to experts, such price drops are expected in September.
Light on the Horizon?
Bitcoin’s rally this year has coincided with the risk-on assets rally. Similar to stocks and other royalties, the price drops often take place in September. What this means is that 10% declines are expected this month, and will most likely continue for a few weeks. While 10% or higher drops are not that common, many experts say that this is fully expected at this part of the year, and should subside soon.
Valkyrie Investments CEO Leah Wald says that sell-offs are a continuation of a pattern where traders either cash in riskier assets or sit on the sidelines until things calm down. Bitcoin’s price is very volatile, and such sharp turns are sure to drive investors away. First-time owners are afraid of losing their assets and invested money, resulting in sharp sell-offs that drive the price further down.
While Bitcoin’s latest drop coincided with stocks, it doesn’t mean they’re correlated. It also doesn’t mean that it won’t happen next time. Bitcoin’s price can still drop when stocks go down, but sometimes it may go different.
Gold Futures on the Rise
While Bitcoin was down, gold futures were on the rise. They climbed nearly a full percent on Monday, bringing the price to $1,765 per ounce. Global equity markets are falling down as investors are scared by the shakeout in China’s Evergrande case.
The highly indebted developer has total liabilities of over $300 billion, with the company struggling heavily to pay suppliers and investors. The Evergrande crisis is expected to slow down China’s economic growth, and it’s affecting Bitcoin’s price indirectly as well.
When it comes to what Bitcoin investors should do, experts say to wait another day. Due to the high volatility, Bitcoin’s price can go up as fast as it can go down. It’s good news that it didn’t close the last day under $40,000, so there’s still plenty of potential for things to change pretty soon. Bitcoin could start climbing toward $50,000 again if there are positive developments on a global scale.
The decline comes at a time of uncertainty about the regulation of stablecoins. With many countries designating them as risky, the crypto market won’t be able to flourish. However, everything could change in a flash and help the market reach new heights. At least that’s what investors and holders are hoping for.