The first-ever cryptocurrency of the world had been riding the Bull-Run for far too long. However, the rally was jolted on the eve of Monday, 22nd February, 2021, when the upward rally was halted by unusual circumstances. It was witnessed that the fall caused a decline in Bitcoin’s value of about 17%, which is rather an unusual decline. The apprehension which emerged was that Bitcoin might have been overbought.
Now the biggest question that is being asked by the crypto community is whether the Bitcoin rally has come to its inevitable end? Or whether the legendary coin has come to the brink of collapse finally?
Unexpectedly two major incidents occurred to Bitcoin on Monday. The first one was the value spike wherein Bitcoin’s value surged for at least 17%. It then went upto US$ 58,000 +. But later on, the fall occurred for at least 11% and the value came down at US$ 50,000.
Janet Yelle, Secretary for US’s Treasury along with Bill Gates were also amongst those who were found debating on Bitcoin. Gates advised a word of caution and suggested that Bitcoin investors wouldn’t be able to find remnants of their investments. He was of the view that though Bitcoin was the champion of 2020 however the champion is likely to be swept away very soon. Meanwhile, Yellen was of the considered view that Bitcoin transactions are awfully disgruntled.
In the meanwhile, the financial experts have suggested that the global economy is now in the process of reviving. According to them, new methods of easy-money procedures will be adopted by central banks of the world. It was this lack of easy-money procedures during the pandemic which eventually helped Bitcoin to prosper beyond expectations.
As per Miller Tabak + Co., Bitcoin shows an over-stretched level on the technical side because of it being overbought.
Meanwhile, NokolaosPanigirtzoglou, an analyst working with JPMorgan & Chase, suggested that Bitcoin’s lucidity has degraded immensely. He further stated that even the lucidity is only ten percent if compared with Gold. The daily average of lucidity for both, Bitcoin and Gold, is US$ 10 Billion and US$ 100 Billion respectively, apprised Panigirtzoglou.
Panigirtzoglou also found stating that Bitcoin is undergoing a serious phase where a fraction would cause great low and high.
Those who are fans of Bitcoin have been stressing that Bitcoin is a better hedge against expected risks, particularly inflation. For this reason, the institutional investment interest has increased for Bitcoin. In fact, economic giants such as Square, Microstrategy as well as Tesla Inc. are amongst those which paved the way for other institutions to join Bitcoin investment fever.
In the words of AMP Capital’s senior official, Nader Naeimi stated that Bitcoin is nothing more than an asset that is in fact speculative only. Therefore, he suggested that any pullback wouldn’t be shocking at all.