The biggest cryptocurrency worldwide, Bitcoin, which recently hit an 11-month high of $30,000, is trading again within a narrow range of the same price. One Bitcoin is currently worth $27,500 at the moment of writing. It was close to the value of $60,000 in the month of November. Bitcoin has experienced several ups and downs. It is now in an upward direction however it’s quite a ways from its record-setting levels.
What do you need to do if you’re currently investing in Bitcoin? Should you do a marathon or hope that Bitcoin will rebound to its most affluent levels within the next few days?
In this in-depth review, we will explain the requirements investors need to do in Bitcoin which is trading at a 50% lower level than its most recent value.
What Is Happening to Bitcoin?
After the events of the FTX collapse and the banking crises across the U.S., Bitcoin has managed to survive in the midst of massive market pressure and uncertainty around the world.
2023 is expected to be an eventful year for the most powerful digital currency, Bitcoin (BTC). Bitcoin reached its 11-month highest last month, at $30,000, and is currently trading at $27,000, announcing an increase of almost 2 per cent in just a week.
After the devastating November crash, in which Bitcoin was trading between $16,000-18,000 levels, the price has gained nearly 80% however, it is still in the red. BTC is trading at least half less as it surpassed its record high of $69,000 in November 2021.
$30,000 and put up a strong resistance
As we can see, the month of April was when Bitcoin reached the critical threshold of $30,000 and put up a strong resistance at $29,000. However, this uptrend isn’t going to last for long, as other variables keep pulling or pushing the price up and down.
One of the recent issues that is affecting the price of Bitcoin is the increased congestion in the Bitcoin network. This has led one of the biggest marketplaces for exchanges Binance in a decision to stop Bitcoin related withdrawals for a second time in a row, says CNC Intelligence Review.
Why Did Crypto Exchange Binance Pause Bitcoin Withdrawals?
Bitcoin has plummeted to $27,000 as the largest crypto exchange Binance has stopped bitcoin withdrawals twice during a day on May 7th 2023, 2023, in the midst of huge volume. As a result of this change, Bitcoin is almost down by 2%, at $27,600 at moment of publication the lowest point of one week. Also in March, Binance, suspended deposits and withdrawals of Bitcoin because of technical problems.
Binance stated in a tweet that it was forced to make this decision due to the fact that it was a sign that the Bitcoin network was facing significant problems with congestion that affected the Bitcoin network in general. Then, about an hour later Binance began to resume Bitcoin withdrawals.
Binance was forced to take this action due to an overhaul of all pending transactions involving Bitcoin which meant that the platform was unable to provide miners with an enticing reward rate for processing trades that are made on the blockchain. Binance also said via their Twitter account that their fee was not in line with the recent rise in Bitcoin gas costs for the network and therefore they have decided to replace the Bictoin withdrawals that are pending with higher fees to ensure they are taken care of from mining pool.
It is the first time that Bitcoin miners are more money to process Blockchain transactions contrast to the monetary rewards they received to create new Bitcoins. It is a fresh trend in which transaction costs have surpassed block reward. The trend has gained quite a bit of attention within the crypto market and has forced Binance to suspend its BTC withdrawals for a period of time.
Other Reasons Behind The Bitcoin Price Fluctuations
Bitcoin which began 2022 on positive vibes, and may have reached its highest at the end of 2022 however, certain unlucky events caused numerous swings in the value of BTC and caused BTC plunge from $50,000 to $15,000 levels within the past year.
The recent price volatility in Bitcoin and across the cryptocurrency market are due to the unpredictable macroeconomic headwinds as well as the recent snafus within financial markets in the U.S financial system. Between 2022 and 2023 Bitcoin experienced a flurry of fluctuation and volatility due to a variety of reasons including:
Shaky U.S. banking system
After the effects of the war between Ukraine and Russia.
Fears of inflation in developed countries.
Uncertainty arising from the an increase in rate of interest in U.S. and UK.
A strict approach and a stringent tax regime in India.
Shutdown of the major cryptocurrency exchanges, such as Bittrex under a strict regulatory framework.
The collapse of the world’s largest cryptocurrency exchange FTX, the largest cryptocurrency exchange in the world.
The volatility of prices for Bitcoin was caused by the causes mentioned above. These unexpected and unlucky back-to-back events have not only led to a rash of sell-offs as well as panic selling in markets, but they also been a significant factor in making investors feel confused.
What Does Bitcoin Fall Mean For Crypto Investors?
Bitcoin is one of the most sought-after cryptocurrency options among the vast majority and has been touted as an alternative to gold. This means that it has the potential to be used as an inflation hedge. Additionally, Bitcoin is the only cryptocurrency that is widely recognized as a legitimate payment option, similar to fiat currencies. However, these companies are extremely few in numbers.
People who are investing in Bitcoin understand they are aware that digital assets are highly unpredictable and susceptible to fluctuations even within the space days and hours. That means that Bitcoin’s price depends on speculation by investors as to whether it will go up or down in the near future. The majority of investors believe that as fast as Bitcoin prices decrease and fall, they can just as rapidly rise.
Market experts are of the complete belief that, given its volatility there is a chance that at some point Bitcoin will regain momentum and begin to show a price rise in the near future, which could be months, weeks or even years in the future. People who are in favor of Bitcoin consider it to be an excellent investment choice that assists in diversifying the portfolio and may yield massive gains at any time as compared to other forms of investment. However, prior to making a decision to invest in Bitcoin one should be aware of the fundamentals which can assist them in making an informed investment decision.