The Crypto Market Dip – Reasons Why
The crypto market decline over the weekend has left investors with lots of doubt. Crypto assets such as Bitcoin are struggling to achieve new highs after the market dip. You cannot deny that the virtual market has the highest volatility at the moment. What do you think about the current situation in the cryptocurrency atmosphere? Investors feared as crypto platforms such as WzirX failed to handle the increased trading volumes.
On Wednesday, a scary shift in the entire crypto market affected assets such as Dogecoin, Binance Coin, Ethereum, and Bitcoin. The whole cryptocurrency market declined in value by 10%, as BTC was trading at about $30,000. Most top-ten assets in the market cap were in the red zone. However, what is the reason behind the recent market dip?
- Elon Musk Says No
The crypto market started declining early the past week after Elon Musk, Tesla CEO, announced the company’s Bitcoin transactions suspension. Tesla Company stopped using Bitcoin due to the environmental impact that the coin has on the surrounding. The statement by Tesla confused investors since the firm was contradicting its earlier remarks. Remember, the company invested $1.5 billion worth of BTC early in January.
Elon Musk has promoted cryptocurrencies such as Dogecoin and Bitcoin this year. The news from a crypto icon sent both ETH and BTC prices tumbling.
- China’s Announcement
China’s declaration is among the contributing factors to the current market dip. On Tuesday, the country banned payment companies and financial institutions from conducting cryptocurrency transactions.
China closed its local crypto exchanges in 2017. Keep in mind that at that time, China accounted for about 90% of BTC transactions. Although the news might not have reached a bigger audience, it fueled the current dip in one way or the other.
- Fear
Emotions have never been profitable in cryptocurrency trading. Fear grew among investors as the crypto market declined after China’s announcement. It is with no doubt that most crypto enthusiasts are trading with greed and fear for now. With that, they will not make better decisions when investing, thus the market dip.
Do you think that the cryptocurrency market will recover from recent declines? You can comment below.
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