In one day, Bitcoin recovered the $10k it shed previously.
On Wednesday, a spot of panic brewed in the cryptocurrency investing scene as Bitcoin, the stable frontrunner of cryptocurrency, suddenly shed over $10,000 in valuation, dropping from its $44,000 valuation to a three-month low of $30,201. It’s not known precisely what caused this sudden drop-off, though some have theorized Tesla CEO Elon Musk’s recent comments about the negative effects of Bitcoin on the environment may have affected investor confidence. China’s recent decision to disallow the use of crypto in commerce also likely put a damper on the mood. Whatever the reason, a panic selloff seemed likely.
However, as of today, Bitcoin has almost entirely rebounded, jumping back up to around $40,000, leaving investors still holding somewhat confused, yet optimistic, while those who sold off in the panic are left with nothing.
“You can’t keep a good dip buyer down for long in the financial markets these days, and cryptos are no different,” Jeffrey Halley, a senior market analyst at Oanda, told Bloomberg. “The mass liquidation yesterday will have thinned out the ranks of believers.”
Bitcoin briefly tops $40,000 as it struggles to recover from brutal sell-off https://t.co/Kw02cQlr90
— CNBC (@CNBC) May 20, 2021
According to Halley, “$30,000.00 is the line in the sand now, and another capitulation wave will follow if it breaks.” He added that if Bitcoin’s value can get firmly above $40,000 and hold its ground, investors should start returning to the scene, confidence restored.
“This market presents opportunities for people now, but I think you will see people wait and let it settle,” said Todd Morakis, co-founder of digital-finance product and service provider JST Capital.