Will Bitcoin drop below $20,000?

Last Friday we saw the price of Bitcoin drop below $21,000 to $20,748 losing about 9% of it’s value and then quickly bumping back to the lower $21,000 areas swinging with a few hundred Dollars.

The entire crypto market has dipped below a total value of $1,000 billion. That’s not yet the market low of June 18, when the market caps of all crypto-currencies lined up only reached $780 billion, but it’s close. What doesn’t help is that regulators are trying to hit bitcoin with new rules. Not only in their tougher stance on money laundering, but also in the call for less energy consumption. The United States House Committee on Energy and Commerce, a key energy committee in America, says it is “deeply concerned” that proof-of-work mining is driving demand for fossil fuels. U.S. authorities have asked bitcoin mining companies to report their energy consumption.

Substantial volatility with bitcoin and other crypto currencies is not uncommon, but especially the past 9 months it mainly went down. What is certainly not helping is that greed level has completely disappeared from the crypto market place. Maybe this is all just a good thing but it is definitely playing a part. One of the indicators of greed is that futures are more expensive than spots. When greed is on the rise, it is considered to be a contrarian sell signal.

Time to panic?

Panic is quite a dramatizing word to the situation. As said before, the cryptocurrency market is extremely volatile and yes it does not help to see the price of Bitcoin going mainly down the past 9 months and that there might be a smaller demand for Bitcoin, it is not motivating at all. Yet on the other hand, we do see a bigger application and usability for Bitcoin. It is yet too soon to say what the price of Bitcoin will do for the cryptocurrency market but it is clear to say that it will have a big impact on the market and Alt coins.

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