Bitcoin, the world's largest cryptocurrency, is trying to regain momentum after a weekend crash that wiped out more than 10% of its value. The sharp and sudden drop on Saturday came right after the news that Iran had launched an unprecedented attack on Israel.
“It still hasn't recovered from that sharp pullback,” Bitwise president Teddy Fusaro told Fortune.
“It was the only asset that could be traded in financial markets at the time, which is one of Bitcoin's unique strengths,” Fusaro said, “but it also makes it susceptible to fluctuations in price over the weekend because it was the only place for risk transfer at that time.” .”
According to Vetle Lunde, a senior analyst at K33 Research, peaking uncertainty caused traders to reduce risk and market makers to withdraw liquidity, leading to a major shakeup in the crypto market.
On Sunday, Peter Schiff, chief economist at Euro Pacific Asset Management and a noted crypto critic, suggested that Bitcoin could trigger a drop to $20,000 if it falls below $60,000, which he sees as a “critical support.” He warned that Microstrategy, the largest institutional owner of Bitcoin, could lose an estimated $2.7 billion in such a scenario.
Many investors are excited about the upcoming halving, and Bitcoin rose from around $44,000 at the end of the year to almost $74,000 in March.
However, Fusaro does not expect the halving to lead to a meaningful rally either before or immediately after the event. “The compounding effect of reduced new supplies takes months to materialize, and we do not expect this halving to lead to a meaningful rally either before or immediately after,” he concluded.
*This is not investment advice.