5 reasons why Bitcoin Price might crash hard soon

Bitcoin was launched in 2009, and it caught the attention of only a few people. But with time, things changed, and slowly more and more people got to know about the cryptocurrency and in no time this lead to the formation of a whole new crypto community.

Soon more and more people started entering the market for buying Bitcoin and to invest their money. As the demand for Bitcoin increased, it’s price increased as well. This rise and demand situation saw more miners entering the market, which increased the number of Bitcoins available in the market. Soon things picked up for Bitcoin as it became the dominating cryptocurrency in the world.

Before people could keep track of the events that were happening, Bitcoin reached the ATH of almost $20,000 in the year 2017. This sudden rise in the price attracted more and more investors towards the cryptocurrency. As more people started entering the market, several things followed them as the market took a bearish turn and crushed people’s hope of having another bull run.

This sudden bearish trend in the crypto market affected the trades very badly as price saw a sudden drop below the levels of $4,000. This lead to many people selling their Bitcoins at a huge loss out of panic, while some decided to hold their position and wait for another upward trend wave to recover their investment.

The bearish trend is hard to fight as the bears in the market try to pull the price further down to have total control over the market and trade and make their profit. However, things got better over time as the price again reached a decent level and maintained a steady trade on those levels. Recently, Bitcoin has been fluctuating like anything, which makes it hard to be sure about what can happen next to the Bitcoin.

There are few reasons which might cause a hard crash in the price of Bitcoin in the future, these are:

1. Market Manipulations

Market Manipulations has been considered as one of the main reason behind the sudden rise and fall of the Bitcoin charts. Market manipulation is the process of intentionally dumping or taking Bitcoins from the market to increase or decrease the demand for Bitcoin. This sudden change in the need for Bitcoin leads to a rise or fall in the market.

Market Manipulation is carried out by a group of small investors that hold a large number of Bitcoins, and these investors are known as the whales. These people wait for the right time to cause an increase or decrease in the price of Bitcoin.

Every action taken by these whales explains the market trends and what should be done to avoid such situations in the future. These whales work in such a way that it becomes necessary for the investors to buy the crypto at a low price or sell at a high price. In case people confuse this with a natural rise or fall, this can lead to a bearish trend in the market because no price can stay stable at on a single place for a long time.

2. Natural Decline in the market

As Bitcoin became popular, and its demand increased, people started moving towards cryptocurrencies as a form of investment. But this happened in 2017 when Bitcoin witnessed the ATH of almost $20,000. With time the popularity increased but the bad reputation given to it by anti-crypto personalities and the lack of support by governing bodies lead to a decline in the price.

The trend of fast buying and selling lead to fluctuations in the price. The sales and purchase of a product keep on changing, and it is never consistent. Along with this, various other cryptocurrencies are being introduced, and with the news of Facebook’s Libra on its way, Bitcoin can again see a sudden drop in the prices as people might get curious to try out the new digital currency.

3. Market Volatility

Bitcoin gets mixed reviews for how volatile it is in the market. The volatility of Bitcoins is very high as it cannot be considered as an asset yet since it will be too soon to say that. There can be various reasons for this as well.

News events affect the price of Bitcoin badly as various events have various effects on it. Any statement by government officials against Bitcoin or any geopolitical event causes the fear of Bitcoin being regulated.

Such news cause sudden panic in people which drives them to sell their Bitcoins as compared to fiat currencies, and the price declines rapidly. The second reason for this can be the uncertainty of future Bitcoin’s value. Bitcoins volatility makes it an unclear store of value. An ideal situation would be transmitting some property in the form of an asset from one party to another, but Bitcoin does not fall under that category yet.

4. Bakkt Launch

Bakkt decided to launch their warehouse service where they would offer secure storage of customers Bitcoin for them while they work on the launch of other services- Bakkt Bitcoin Daily and Monthly Futures. However, this might seem like a bullish sign to people, but the case is different.

Bakkt has launched its warehouse service aiming at the institutional investors, and it’s only a sensible call to enter the market when the prices are low. This situation will lead to market manipulation as the whales would pressurize the support levels to drive the retail investors to sell in panic.

5. Government Regulations

Ever since Bitcoin has gained popularity in the crypto market, many government bodies have started interfering in the crypto world by trying to impose regulations on them.

It has been a tough time for Bitcoin from the past 2 years as many countries have banned its usage while some have decided to limit their working or change their monetary policies. For example, India imposed a cryptocurrency ban, and the exchanges were forced to shut down their business for troubles caused by banking sectors.

Then China decided to block foreign cryptocurrency exchange, and local exchanges were shut down as well. Being a huge market for the miners, China had to alter their decisions a little and people are not allowed to trade cryptocurrencies, but they still hold their investments in various digital wallets.

Recently, PBoC announced that they have decided to launch their digital currency which will be regulated by various exchanges, but it will be a centralized digital asset. This ruins the purpose of a decentralized cryptocurrency, but things have changed since then. South Korea prohibited people from using cryptocurrencies from unverified accounts, and they can hold their funds in digital wallets only if the account information and bank account details match.

Facebook’s Libra is ready to be launched, but it is facing backlash from governments as well as the SEC and U.S. Treasury which have asked Facebook to be transparent about the working and only then it will be allowed to launch its service.

Such harsh steps and conditions lead to a fall in the adaption of cryptocurrencies as people lose interest in them due to such strict restrictions and uncertainty in the decisions as well as the market.

Vineet Chaudhary
Vineet Chaudhary
Vineet Chaudhary is a content writer with computer applications as his background field. His interests range from writing and photography to going out for trips and rides on weekends.

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