CoinShares strategic director Meltem Demirors in an interview with CNBC explained the fall in Bitcoin as a correction after a 200-day rally. Demirors recalled that assets cannot show constant growth in any existing market. The current correction saves the cryptocurrency market from “paper hands”, she says.
“Paper hands” called crypto-investors who cannot withstand the turbulence of the market. So, they sell assets due to a decline in quotations. Accordingly, in such cases, they not only record losses, but also remain without an asset. Which is usually bought again – but already at a noticeably higher price.
This is the complete opposite of investors who called “diamond hands”. They do not sell digital assets under any circumstances because they are confident in their growth in the long term. Moreover, on landslides, they only make purchases.
Many companies that managed to enter the crypto market without conducting relevant research are now selling digital coins, Demirors said. According to her, statistics on address activity show that long-term holders continue to accumulate cryptocurrency.
The fall of Bitcoin scares off only beginners
Panic over the fall of Bitcoin is a clear sign of a newcomer to the crypto market.
On June 22, the cost of Bitcoin for the first time since January of this year dropped to $28.8 thousand. On June 24, the price of the main cryptocurrency is $ 33.6 thousand. From mid-April, when Bitcoin rate rose to a historic maximum of $64.3 thousand, the coin fell in price by 47%.
Thus, over the past two months, the value of the main cryptocurrency has almost halved. While many altcoins have dropped even more. For new investors, such events can be a deterrent factor. However, most long-term holders are not going to leave the crypto space. At least this indicated by the data on the blockchain and the point of view of popular personalities within the industry.
And although many novice traders are probably intimidated by what is happening in the industry, analysts and experts are not very worried about the situation. At the very least, they understand that Bitcoin and cryptocurrencies in general will not disappear anywhere, so sooner or later serious coins will update their historical highs.
“Bitcoin has always been a volatile asset. I would not be surprised if it returns to $ 20,000. In March last year, 1 BTC was worth only $ 3,000. One should always take into account its volatility”, said Demirors.
Demirors expects Bitcoin to continue holding at its current level for a long time, as there is great uncertainty about the future actions of the regulators. In addition, media headlines are “full of negativity” about Bitcoin and cryptocurrencies, which also puts pressure on the market, Demirors said. She previously stated that Bitcoin should not be called “digital gold” as it has nothing to do with precious metals.
Meanwhile, Q2 2021 was the worst period for Bitcoin since the start of the bearish trend in 2018, according to market research firm Skew.