Bitcoins recent volatility has been all over reddit, Yahoo News, Bloomberg, wallstreetbets and Twitter. Bitcoin’s price fell as low as $28,728 Tuesday morning which resulted in a negative return for 2021. Bitcoin ended the year in 2020 at $29,026 and looked extremely bullish for the coming months. 6 months later in June, the price took a round trip from going as high as $65,000 back down now to around $30,000.
The $30,000 price level has been a strong demand area during 2021. Technical analysts are focused on this price level, and also believe the next area of support could be as low as $20,000.
Galaxy Digital CEO Mike Novogratz said on CNBC’s “Squawk Box” that bitcoin can still rebound after Tuesday morning’s dip, but also adds that there’s plenty of downside risk down to the next support level.
″$30,000, we’ll see if it holds on the day. We might plunge below it for a while and close above it. If it’s really breached, $25,000 is the next big level of support,” Novogratz said. “Listen, I’m less happy than I was at $60,000 but I’m not nervous.”
Elon Musk, president and CEO of Tesla Inc., has been blamed by several investors and analysts as being the catalyst for the fall in Bitcoin’s price with his market-moving tweets about environmental concerns with mining bitcoin. Musk also made the decision to remove bitcoin as a payment method for ordering a Tesla which shocked investors.
Since then there has been a frenzy of headlines from China focusing on regulations and restrictions on energy-intensive mining, and forcing financial institutions to discontinue doing business with crypto companies.
Other crypto currencies have seen major declines the past month, and highlights the volatility and risks associated with investing in crypto currencies.
Cryptocurrency investors from years past are not new to volatile conditions. In 2017 the price of bitcoin fell about 80% from its high point. Analysts insist that the crypto market will continue to be volatile in the years ahead.
“The only guarantee with the cryptocurrency space is volatility and obviously, that’s what we have right now,” Fairlead Strategies founder Katie Stockton told CNBC. “It’s not new, we’ve had days like this before, it’s just a matter of navigating through this noise.
Despite the recent decline, Bitcoin is still up over 200% over the past 12 months.