Bitcoin’s price dropped back below $ 30,000, a sort of symbolic bar that scared many observers. And now ? Maybe … nothing at all.
This is it, it happened. The value of bitcoin fell below $ 30,000 on June 22, 2021 in the afternoon, as can be seen on many stock market monitoring sites in near real time. This descent only lasted a few hours: around 5 p.m., the virtual currency had already risen slightly.
It did not take more for many media to resume the news in chorus: bitcoin ” dive under 30,000 “Here, or” sinks under 30,000 ” over there. But why is this value so important? Two weeks ago, Numerama asked himself exactly this question, and answered it in detail here.
For beginners, the explanation might seem complex, but it is actually quite simple: it is a symbolic threshold, but it is so strong that it has very real consequences on the stock markets and financial investments. .
Bitcoin may very well recover quickly
On the stock market, there are “resistance” thresholds: it is a value below which analysts consider that the asset will not fall. If it dropped lower than this number, then the signal sent would be very negative. What observers, and especially investors feared, was that if bitcoin plunged below $ 30,000, then it could fall much lower, to the $ 7,000 around which it had stagnated since 2018 (after a first big peak in 2017, when the threshold of 30,000 dollars was paradoxically considered as a “high” resistance, almost impossible to reach).
« It’s the opposite of what happened before: if we manage to hold this threshold and not go below, then the signals will be good. We can go back. But if not, the crash could very well happen », Explained Guilia Mazzolini, France director of BitPanda, a cryptocurrency brokerage company. ” If we go below 30k, there is another level of resistance around 20k. However, it is less resistant because there is not this symbolic aspect that the 30K have. So, potentially, we could fall even lower – but there are a lot of ‘ifs’. »
This last sentence is important: the price of bitcoin is random, because the unknowns are very numerous. Very few experts would venture to claim that bitcoin below $ 30,000 would lead to an irrepressible tumble. For now, history proves them right: by 5 p.m. on June 22, bitcoin had already risen to $ 30,092.
This is one of the most instinctive mechanisms to understand in the stock market: the price of a currency falls if many people sell their assets. But on the other side, there are also smart kids, who wait until the price is low to buy bitcoins, in the hope of reselling them when the price has risen. Also, when bitcoin drops below the famous $ 30,000 threshold, some may feel that this is the right time to invest. And so, buy bitcoin. And thus increase its value. Over $ 30,000.
The ups and downs of bitcoin
Bitcoin has suffered a very significant fall since the beginning of May 2021, after experiencing an equally exceptional surge in the first half of 2021. Virtual currency, probably the best known of all cryptos, not only reacts to the evolution of the market , but also to the announcements of many powerful players.
For example, influential billionaire Elon Musk first invested heavily in bitcoin via Tesla, then he went back, seeming to realize that mining this cryptocurrency was very polluting. He then took pleasure in sowing panic in the stock market, implying that he was able to sell all his bitcoins, even if he had sworn not to do so.
On the other side of the board, there is China, which announced that all its banks must stop allowing exchanges and transactions in virtual currencies. Then she cut off the power to companies that mine bitcoin. Then the Chinese Central Bank reformulated, once again, its order for other banks to ban crypto transactions.
The continuation in video
Source: Numerama by www.numerama.com.
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