Bitcoin price falls due to increased liquidations and a stronger US dollar
Bitcoin faced the sharpest decline in price since December 2023, with its value falling to below $42,000 on Friday. Ethereum also experienced a sharp decline on Friday, although it recovered on the same day.
Meanwhile, the global market cap for crypto is at $1.62 trillion, showing a 3.23 percent decrease in a day. Two reasons contribute to the downward trend in the crypto market: the strengthening of the US dollar and increased liquidations.
A statement from Jamie Dimon, the CEO of JPMorgan Chase, regarding Bitcoin also contributed to the market’s uncertainty. Dimon’s assertion that Bitcoin is “worthless” influenced public sentiment, at least temporarily. Despite this, the overall outlook for Bitcoin remains cautiously optimistic. This optimism persists amid the anticipated Bitcoin halving event in April and evolving regulations.
Speculations surrounding Bitcoin
Bitcoin halving is an event when the reward for mining Bitcoin is cut in half. Every four years, the halving occurs to reduce the rate of Bitcoin creation. The last halving happened in May 2020 when the mining rewards fell to 6.25 BTC from 12.5 BTC. In the past, the halving event has always been followed by a bull market.
The halving this year is expected to cause the price of Bitcoin to drop to the range of $36,000 to $39,000, presenting a golden opportunity to buy Bitcoin.
Crypto traders, including Michaël van de Poppe, anticipate that if Bitcoin’s price drops significantly, institutions will seize the opportunity to purchase assets at a lower cost in anticipation of a future bullish trend. They emphasize the strategy of buying low and selling high in the crypto market and warn potential Bitcoin buyers about the Fear of Missing Out (FOMO). These traders advise focusing on long-term investments.
However, analysts also speculate about the possibility of a sell-off before the halving, potentially triggered by the approval of a Bitcoin Spot ETF. Such an event could alter the behavior of institutional investors and increase market volatility.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information