Just as Bitcoin fans were gunning for a record-breaking high, the cryptocurrency came tumbling down. The cryptocurrency fell nearly $3000 on Thursday, a day after hitting $19,300 and was inches away from its 2017 high of $19,783.Bitcoin prices have been on a tear in 2020, with a record run for 119 days. It has surged over 293% since March 2020. On Thursday, Bitcoin’s worth crashed to $16,277 and has seen some recovery. It currently stands at $17,309.
The rally was triggered as institutional investors gained faith in the cryptocurrency asset as it garnered interest from marquee investors as well as PayPal accepting cryptocurrency on its platform. Bitcoin’s bull run had also resulted in overbought level conditions with other top cryptocurrencies as well.
However, bitcoin experts have called it a healthy correction. “A few days back, Bitcoin broke through $19,000 after posting seven weeks of consecutive gains. This resulted in the need for a correction, and we witnessed a healthy pullback in the crypto market, including Bitcoin. This pullback is important for the overall health of the market, and I am expecting Bitcoin to consolidate from here over the next few weeks, and we are likely to see Bitcoin testing the support of around $14000,” Sumit Gupta, CEO and Co-founder CoinDCX told Business Insider.
Even before the fall in prices, experts had said it would be foolish to believe that there would be no correction. When Bitcoin touched $19,000, Vikram Rangala, Chief Marketing Officer at ZebPay, had said that no one could predict how far a rally can go, so short-term speculation is very risky.
“However, there is one smart investment strategy: cost averaging for the long term. Buy small amounts of bitcoin daily or weekly, hold it long-term through the ups and downs, and stick to your buying plan for years, not months. It’s like an SIP for bitcoin. No one knows how far this rally will go, but at some point, there is always a correction. Anyone who pretends to know more than this is fooling himself or others,” said Rangala.
Rangala said that along with periodic corrections, Bitcoin could easily hit ₹1 crore by 2030, and investors should plan their bitcoin investments by years and not months.