The price of bitcoin went down sharply. Its price in May 2022 fell below $30,000 and may fall below $27,000 in the short term according to various estimates. Analysts attribute this to the listing of tens of thousands of tokens on crypto exchanges. That is, an increase in supply always entails a fall in price. Against this background, over 40% of investors who invested in bitcoin turned negative.
Bitcoin (BTC) in Free Fall
Bitcoin, the largest cryptocurrency in the world by market cap, began to rapidly lose value in the first half of May 2022. So, on May 10, 2022, the bitcoin rate fell below the psychological mark of $30K and stopped at $29.97K. Such statistics are provided by the large crypto exchange Binance. The last time Bitcoin fell below $30,000 was in July 2021.
These statistics diverge from the indicators of the profile resource CoinMarketCap, which calculates the average price of cryptocurrencies based on data from more than 20 crypto exchanges. According to its statistics, bitcoin fell to $26.7K on May 12, 2022.
Nevertheless, everyone agrees on one thing cryptocurrency is seriously getting cheaper. For example, on April 12, 2022, bitcoin was worth over $42.23K. This price is calculated based on the XBX index, the spot rate of bitcoin. The index value is calculated based on the observed trading activity on the largest crypto exchanges.
Bitcoin Is Going Through Hard Times
At the time of publication of the article, the bitcoin exchange rate was about $28.35K with a market cap of $539.7 billion. Experts do not yet undertake to indicate the exact reason for its collapse, since there have been no high-profile events, including geopolitical ones, over the past few days in the world happened.
For example, in January 2022, bitcoin fell sharply in price against the background of the statement of the Central Bank of Russia about the need for a complete ban on cryptocurrencies in the country.
Experts from the analytical company WhaleMap believe that the new fall in the price of bitcoin is a consequence of the rapid influx of cryptocurrency to exchanges. According to their calculations, in just one day, May 10, 2022, the number of bitcoins on exchanges increased by more than 40.6K. This is a record for more than two years — the last time such a large decrease in price was recorded in December 2019. Then the same event caused the price of bitcoin to fall.
In general, in the first days of May 2022, the maximum number of coins arrived on exchanges over the past three months. All this, according to WhaleMap analysts, is the reason for the current rate collapse.
Investors Are Losing Money
Over the past month, bitcoin has fallen in price by an average of 12%. However, if we compare its current rate with its peak rates in November 2021, then the fall is already within 55%.
According to CNBC, the collapse of the world’s main cryptocurrency hit hardest of all those investors who decided to exchange their fiat money for bitcoin. About 40% of bitcoin holders turned negative.
In fact, this figure is even higher. This is due to the fact that the statistics take into account all, without exception, investors who have invested in bitcoin. If we exclude from them those who have invested in it in the last six months and managed to withdraw money, then the percentage of those affected by the rate collapse will skyrocket.
Other Cryptocurrencies Follow Bitcoin Crash
An attempt by investors to quickly swap their bitcoins, for example, for ether in order to save money, is obviously doomed to failure. The price of most cryptocurrencies, including those unknown to anyone, always follows the bitcoin rate.
In other words, if bitcoin grows, then, for example, Monero also rises in price. Falling in price, bitcoin drags all other tokens with it.
In May 2022, the entire cryptocurrency market shows a negative trend. Moreover, many digital currencies can fall in price many times faster than bitcoin. For example, in recent days, a Cronos token has fallen in price by 26%, and Solana by 14%. Among the ‘record holders’ are also Stepn (-26%), Nexo (-20%), Terra (-19%), Kadena (-18%) and Arweave (-17%) currencies.
Conclusion
Many analysts agree that in the foreseeable future, the rapid growth of bitcoin and the entire crypto market will not happen. According to WhaleMap forecasts, Bitcoin, on the contrary, will continue its fall. Analysts believe that in the near future the rate will reach $27,000 with a perspective of its even more rapid fall.
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