Why is Bitcoin down today? – Forbes Advisor INDIA

Bitcoin dominates the cryptocurrency landscape and is widely known among crypto investors. As the largest cryptocurrency in the world, it hit a new all-time high of $73,750 on March 14, 2024. However, BTC has been undergoing corrections for some time now. As of May 27, 2024, it is trading at $68,630 with a market cap of $1.35 trillion, representing a 6.95% decline from its peak. Bitcoin saw a decrease of 0.93% in the last 24 hours, but increased by 2.63% in the last seven days.

Let’s delve into the current state of the Bitcoin market and the reasons behind the sudden price drop.

How is Bitcoin performing May 2024?

Bitcoin is currently down as investors fear that the S&P 500 may be topping out. The prices coincided with the S&P 500 futures after peaking last week at a high of 5,368 points. This led to a surge in the dollar, which in turn put pressure on assets such as cryptocurrencies.

Anticipation of the US Securities and Exchange Commission’s (SEC) final decision on the ether ETFs was also a factor in the BTC drop. Although it was approved by the SEC, there was no significant change in the prices of Bitcoin. The price performance of Bitcoin in the last 24 hours is $68,183 (low) and $69,506 (high).

The value of Bitcoin has fallen about 19.59% from its peak of $73,750, with BTC falling below $60,000 in the first week of the month. Currently, the markets are grappling with regulatory exploration, with the Securities and Exchange Commission’s renewed force against significant players in the crypto world such as Consensys.

On the other hand, the hype is cooling down around the Spot Bitcoin ETFs. Blackrock ETF experienced outflows for the first time since it began trading in January, with nearly a net $36.9 million leaving the fund. This indicated that even institutional investors are not immune to market sentiment and Fear, Uncertainty and Doubt (FUD).

Rajagopal Menon, vice president of WazirX, a major crypto exchange in India, states that “economic indicators present a mixed bag: the FOMC’s recent stance points to a cautious approach to rate hikes, with persistently high inflation creating a add layer of uncertainty.Additionally, markets are on edge regarding Japan’s economic situation, adding to the uncertainty.

However, Bitcoin’s resilience during these times is noteworthy. Technical analysis indicates that Bitcoin is making a significant upward move, finding strong support at key levels and showing patterns on the RSI that historically precede major rallies.

Additionally, he says, analysts are unanimous that the current market conditions could be a precursor to a major bull run, potentially propelling Bitcoin to previous all-time highs. This is reinforced by a significant accumulation of whales and exchanges, creating a supply shock that is likely to drive prices upwards. For investors, the advice is to remain patient, invest systematically at these levels and stay focused on the long-term potential of Bitcoin.

Parth Chaturvedi, Investment leads at CoinSwitch Ventures, says that BTC as an asset class does not trade in isolation and is influenced by macroeconomic factors. With US inflation higher than expected, investors are rebalancing their positions for higher interest rates for longer. This does not bode well for risky asset classes and has a detrimental effect on crypto prices. Additionally, BTC prices have nearly doubled since Jan on the back of Spot ETF inflows and the halving event. The downturn in prices was also reinforced by profit sharing.

Bitcoin price movement (one-month data)

From 27 May 2024:

Source: CoinMarketCap

Bitcoin set a new record of $73,750 on March 14, 2024, with a market cap of $1.44 trillion. Following this record, it experienced a decline, and the market is currently undergoing a correction. The market sentiment has shifted from extreme greed to miserliness.

Over the past week, Bitcoin has experienced a 2.61% rise, down 6.95% from its all-time high. As of May 27, 2024, BTC is trading at $68,677 with a market cap of $1.35 trillion.

Why does Bitcoin fluctuate?

The beginning of this year saw a surge in Bitcoin prices, with the cryptocurrency surpassing its peak in March 2024 several times, reaching as high as $73,750. However, in the past one month, BTC prices have fallen below $60,000. As of May 27, it is trading at $68,677, representing a 6.95% decline from its all-time high.

The overall cryptocurrency market, including Bitcoin, has experienced price fluctuations due to unforeseen macroeconomic headwinds and the recent impact of Spot ETH ETFs. Let’s examine other factors that have contributed to the fluctuation in Bitcoin prices:

US SEC approves spot ethereum ETFs. Federal Reserve’s interest rate decision. Find Bitcoin ETFs. Post-Russia-Ukraine war consequences. Instability in the US banking system. Fear of inflation worldwide. High interest rates in the US and the UK. Collapse of the largest crypto exchange FTX.

Tips to Consider Before Investing in Bitcoin

Investing in cryptocurrencies is a very attractive concept for people. When it comes to cryptocurrency, Bitcoin is a must-have investment, but you should consider some tips before you go ahead and invest in Bitcoin.

It is advisable and smart to invest 5% to 10% of your overall portfolio in Bitcoin. Treat your cryptocurrencies as a long-term investment plan. Analyze the market volatility of Bitcoin and then invest wisely. To maximize your returns, thoroughly research the best times to buy and sell Bitcoin.

It’s natural for you to wonder if Bitcoin is a safe investment choice, considering its instability and volatility. The entire value of Bitcoin is based on speculation, and it is not a regulated form of investment like mutual funds or stocks. It would be a good choice to consult a financial advisor who will guide you through the process of investing in cryptocurrency that best suits your financial goals.

Once you have a grasp and some understanding of cryptocurrency and are ready to invest in Bitcoin, the next thing you need to know is how to buy Bitcoin from India:

Step 1: Select your crypto exchange and create a free account through their web portal or an app.

Step 2: Register and verify your identity via their platform.

Step 3: You will see a “BUY” tab, which has many cryptocurrencies associated with it. To buy Bitcoin, click on the link attached to it.

Step 4: Buy Bitcoin through the link and choose any mode of payment such as credit or debit card, net banking, or adding funds in the form of INR.

Step 5: Once you have made the payment and purchased bitcoin, it will be stored in your exchange account or personal digital wallet. You can sell it anytime you want or simply trade it for other cryptocurrencies. You can also use it to generate passive income.

Bottom line

Investing in Bitcoin, especially from India, is not as simple as it seems due to the Indian government’s active interest in regulating the crypto market and discouraging investments. If you are determined to invest despite regulatory concerns, it is essential to ensure that you have not allocated all of your savings and are sufficiently diversified. Doing thorough research and monitoring cryptocurrency trading worldwide can help you effectively reduce risks.