The market drop that occurred over the weekend could continue. But the analysts disagree on what caused depression.
Almost all of the leading cryptocurrencies have collapsed by double-digit percentages. Market experts name several reasons, including those that can be attributed to conspiracy theory.
Analysts have been talking about the volatility of bitcoin for several weeks. However, on the eve of the weekend, big amounts of BTC were moved to the exchanges. Several factors might have caused this. The first is that Tesla refused to sell cars for BTC. The second is the announcement that Square will no longer buy BTC to add to the bitcoins that the company has already purchased, about $400 million.
Although Jack Dorsey, CEO of Twitter and Square, hastened to add that “bitcoin changes *everything*…for the better. And we will forever work to make bitcoin better”. But this didn’t reassure investors. Twitter has become the main platform for the crypto community, it is obvious that Dorsey must say positive things in order not to lose clients of his business.
Other negative facts are: the trial of the Chinese crypto billionaire Zhao Dong, who invested in the Bitfinex and Binance exchanges; and an investigation by the Department of Justice and the Internal Revenue Service of the United States in relation to the largest exchange Binance.
For its part, the SEC announced that it considers ETFs (Exchange Traded Funds) on bitcoin as a high-risk asset. And this limits the entry of many funds into this market, many of them are prohibited from working with risky assets. All this news creates a negative background for bitcoin, so its drop was inevitable.
There is a growing conviction among traders and investors that states led by the United States are starting a war against the cryptomarket. The most meticulous researchers believe that the first salvos in this war a year ago were attempts by Elon Musk to manipulate the cryptocurrency market.
Musk is already recognized as an evil genius for the market, repeatedly his verbal interventions have pumped worthless Dogecoin (DOGE) and Shiba Inu (SHIN) coins. In the end, Musk tried to influence the bitcoin price. All this gives the impression that the crypto market is still extremely volatile and could easily crash.
Investors are worried and may return funds to fiat assets again. The United States is interested in this in the face of a weakening dollar. And Elon Musk thus did a big favor to the financial authorities of the States.
If bitcoin does drop to the $30K – $35K level, then it will not be a cryptocurrency market crash or a new “crypto winter”. At these levels, institutionals will buy it, and BTC will quickly return to growth – experts say.