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Why is Bitcoin falling today? – Forbes INDIA Consultant
Bitcoin dominates the cryptocurrency landscape and is widely known among cryptocurrency investors. Being the largest cryptocurrency in the world, it reached 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 3, 2024, it is trading at $59,280, marking a decline of 19.59% from its peak. Bitcoin has seen a decline of 7.92% in the last seven days, but has increased by 2.71% in the last 24 hours.
Let’s delve into the current state of the Bitcoin market and the reasons behind the sudden price drop.
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How does Bitcoin behave?
Bitcoin’s value has fallen approximately 19.59% from its peak of $73,750, with BTC falling below $60,000.
Bitcoin price action over the last 24 hours was $57,560 (low) and $60,004 (high). Currently, markets are in the throes of regulatory exploration, with the Securities and Exchange Commission’s renewed force against major players in the cryptocurrency world like Consensys.
On the other hand, the hype around Bitcoin Spot ETFs is cooling, with the Blackrock ETF recording outflows for the first time since it began trading in January, with almost a net $36.9 million leaving the bottom. This indicates that even institutional investors are not immune to market sentiments and fear, uncertainty and doubt (FUD).
Rajagopal Menon, Vice President of WazirXa major cryptocurrency exchange in India states that: “Economic indicators present a mixed picture: the FOMC’s recent stance suggests a cautious approach to rate hikes, with persistently high inflation adding a layer of uncertainty. Additionally , markets are on edge regarding Japan’s economic situation, adding to the overall uncertainty.
However, Bitcoin’s resilience during these times is remarkable. Technical analysis indicates that Bitcoin is preparing for a significant upward move, finding strong support at crucial levels and exhibiting patterns on the RSI that historically precede major rallies”
Additionally, analysts are unanimous that current market conditions could be a precursor to a major bull run, potentially pushing Bitcoin to previous all-time highs. This is reinforced by a significant build-up in whales and bags, creating a supply shock that could push prices higher. 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, Chief Investment Officer at CoinSwitch Ventures, states that BTC as an asset class is not traded in isolation and is influenced by macroeconomic factors. With higher-than-expected U.S. inflation, investors are rebalancing their positions toward higher interest rates for a longer period. This does not bode well for risky asset classes and has had a negative impact on cryptocurrency prices. On top of that, BTC prices have nearly doubled since January on the back of Spot ETF inflows and the halving event. The decline in prices was also amplified by the accounting of profits.
Bitcoin Price Movement (One Month Data)
From May 3, 2024:
Source: CoinMarketCap
Bitcoin set a new record of $73,750 on March 14, 2024, with a market capitalization of $1.44 trillion. After this record, it declined and the market is currently undergoing a correction. Market sentiment has shifted from extreme greed to greed and is now neutral.
Over the past week, Bitcoin has seen a decline of 8.28%, and is down 19.74% from its all-time high. As of May 3, 2024, BTC is trading at $58,921 with a market capitalization of $1.16 trillion.
Why does Bitcoin fluctuate?
The start of this year saw a surge in Bitcoin prices, with the cryptocurrency surpassing its March 2024 all-time high multiple times, reaching $73,750. However, over the past month, BTC prices have fallen below $60,000. As of May 3, it was trading at $59,326, marking a decline of 19.59% from its all-time high.
The overall cryptocurrency market, including Bitcoin, has experienced price fluctuations due to unexpected macroeconomic factors. Let’s explore other factors that contributed to Bitcoin price fluctuation:
- The Federal Reserve’s interest rate decision.
- Spot Bitcoin ETF.
- Effects of the post-Russia-Ukraine war.
- Instability in the American banking system.
- Fear of inflation around the world.
- High interest rates in the US and UK.
- Collapse of the largest cryptocurrency exchange FTX.
Tips to consider before investing in Bitcoin
Investing in cryptocurrencies is a very attractive concept for people and when it comes to cryptocurrency, Bitcoin is a must-have investment but you need to consider some tips before going ahead and investing 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 volatility of the Bitcoin market and then invest wisely.
- To maximize your returns, carefully research the best times to buy and sell Bitcoin.
It’s natural for you to wonder whether Bitcoin is a safe investment choice considering its instability and volatility. Bitcoin’s entire value is based on speculation and is not a regulated form of investment like mutual funds or stocks. It would be a great choice to consult a financial advisor who will guide you through the process of investing in the cryptocurrency best suited to your financial goal.
Steps on how to buy Bitcoin in India
Once you have some knowledge about cryptocurrency and are ready to invest in Bitcoin, the next thing you need to know is how to buy Bitcoin from India:
Step 1: Take your pick cryptocurrency exchange and create a free account via their web portal or 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. You need to click on the attached link to Bitcoin.
Step 4: Buy Bitcoin via the link and select any payment mode like credit or debit card, net banking or adding funds in the form of INR.
Step 5: Once you have made your payment and purchased bitcoin, it will be stored in your exchange account or your personal digital wallet. You can sell it whenever you want or simply exchange it for other cryptocurrencies. You can stake it to get passive income.
Featured partners
Inheritance
Over 1 million investors trust Mudrex for their cryptocurrency investments
Safety
Mudrex is the Indian government. Recognized platform with 100% insured deposits stored in encrypted wallets
Commissions
Enjoy zero cryptocurrency deposit fees and the best rates in the industry.
Award-winning broker
Listed in Deloitte Fast 50 Index, Best Global FX Broker of 2022 – ForexExpo Dubai October 2022 & more
Best-in-Class for investment offerings
Trade over 26,000 assets with no minimum deposit
Customer care
Dedicated 24/7 support and easy registration
We invite you to invest carefully, your capital is at risk
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 cryptocurrency market and discouraging investments. If you are determined to invest despite regulatory concerns, it is essential to ensure that you have not allocated all your savings and are adequately diversified. Conducting thorough research and actively monitoring cryptocurrency trading globally can help you mitigate risks effectively.