Bitcoin price dives amid ‘perfect storm’ predictions
Crypto’s record-breaking rally came crashing to an end as ‘fear’ enters market for first time in 2024
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Your support makes all the difference.Bitcoin’s market value has plunged by more than $200 billion (£158bn) since the start of the month following a major sell-off of the world’s leading cryptocurrency.
The latest price fall comes after a record-breaking rally that saw bitcoin peak just above $73,000 in mid March. It has since retreated to just over $60,000 amid concerns that the 18-month bull market may be coming to an end.
Despite the recent downward trend, some analysts have described the current market situation as a “perfect storm” that could see it surge to new heights over the coming months, citing technological advancements, regulatory changes and broader economic shifts.
In a market report on Tuesday, analysts at crypto ATM provider Bitomat said the recent bitcoin halving that saw its supply constricted, combined with renewed demand brought about by US regulators approving bitcoin exchange-traded funds (ETFs), could see the cryptocurrency reach between $130,000 and $220,000 by 2025.
“The years 2020 and 2021 saw record-high prices, institutional adoption, and significant mainstream integration, creating a perfect storm for bitcoin‘s growth,” the analysts noted. “As we look forward to 2025, the convergence of these factors presents a compelling case for another major bull run.”
Other major cryptocurrencies have also seen significant price drops in recent days, with Ethereum (ETH), Ripple (XRP) and Binance Coin (BNB) all falling by more than 4 per cent over the last week.
On Tuesday, the Crypto Fear and Greed Index, which serves as an indicator for market sentiment, fell to its lowest point since September 2023, when the price of bitcoin was around $26,000.
Falling into the ‘Fear’ territory suggests investors have “over-sold irrationally”, according to the crypto price index CoinMarketCap.
“Both in September and now, the price and index’s sudden drop out of a range has attracted buyers, laying the groundwork for gains after a prolonged slide,” Alex Kuptsikevich, a senior market analyst at FxPro, told The Independent.
“However, the recovery momentum paused Wednesday morning, raising the question of whether we’ll see a renewed selloff. Such a turn of events risks breaking the multi-month bullish view on bitcoin and, with it, the entire cryptocurrency market... But the base case scenario now remains the development of a rebound and the preservation of the long-term bull trend.”
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