Bitcoin (BTC) Dropped to $32K But This Is Not a Signal for a Panic Sell-Off, But for a “Panic Buy”

Bitcoin (BTC) Dropped to $32K But This Is Not a Signal for a Panic Sell-Off, But for a "Panic Buy"

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The drop of bitcoin and the market caused a panic sell-off of all cryptocurrencies. The trigger was news from China.

Bitcoin fell fast after it became known that Chinese financial institutions were banned from working with digital assets. Three Chinese regulators have issued a joint statement about that. Financial institutions are prohibited from providing custodial services and management of cryptocurrency, and to release products based on digital assets. The regulators named the main reasons for this decision: cryptocurrencies have no real value; the price of cryptocurrency is easy to manipulate; contracts are not protected by Chinese law.

The king of cryptocurrencies reacted to this news with such a sharp drop that in a few hours all previous predictions were confounded. A couple of days ago, analysts were arguing whether BTC could drop to $40K, and today it tested the $32.9K level. For the week, the drop was over 40%. Other cryptocurrencies fell just as hard.

Experts believe that retail investors have succumbed to panic and that their sell-off has brought down the market. But institutionals are holding back the decline. Whales can contain panic, and even a rebound in quotes is possible. Well-known crypto analyst Lark Davis does not consider the current drop in bitcoin to be something special. In his opinion, a pullback from the all-time high of $64.8K was expected. And even such a deep drop as now does not cancel the bull market, which will continue until the end of 2021.

Lark Davis says:

– What we’re currently seeing with Bitcoin – it is not something to be worried about. This is a pretty typical situation that we see happening in the cryptocurrency markets. Chances are in a few weeks’ time, everything’s going to be back to being mega-bullish.

The expert does not see any reason to panic at all and does not advise selling cryptocurrency. On the contrary, he believes that now is the best time to buy cryptocurrency. And it’s better to hurry up – says Lark Davis: “This is a time to be panic-buying crypto”.

Elon Musk provoked the market crash even earlier, before the news from China when he criticized bitcoin, which allegedly consumes too much “dirty” electricity. He also hinted on Twitter that his company Tesla may still sell its cryptocurrency holdings, although Tesla previously stated that this would not be the case.

The flow of negative information may not be accidental. Experts suspect that we are dealing with market manipulation. The target is to redistribute assets in favor of large holders at the expense of retail investors.