Bitcoin Plunge: Should You Be Worried?

Bitcoin plunged 20 percent over the weekend and well, the move was not on most people’s side. If you were affected by the draw, we understand how you are feeling and believe us, eventually things will get better.

Looking at Bitcoin’s history, a trader may find that after most drawdowns, the crypto currency has made its way up and even higher than previous levels. In fact, the times when Bitcoin went down by 20 percent, in average gained 28 percent afterwards.

Demand for the digital currency has been pushing its price to the upside in the last four weeks, reaching out to all-time highs above $7,000.

What was the downturn all about? Let’s put this way: developers behind Bitcoin are facing some challenges when it comes to defining the best way to improve transaction speeds and costs. Uncertainty over the matter weighed on the currency, pretty hard.

Last week, a group of developers called off an upgrade under the name of SegWit2x on concerns about security. The disagreement between miners and developers is what motivated investors to get into “bitcoin cash” and “bitcoin gold”.

The latest one has been recently introduced with the intention to make the creation process of Bitcoin less dependant on specialised hardware.

Earlier this year, Bitcoin faced another challenge, China’s crackdown on crypto currencies. As the government took serious steps to regulate their use and banned ICOs (Initial Coin Offers), Bitcoin felt under pressure.

However, not all governments are reluctant to the idea of Bitcoin. For instance, Japan accepted its wide-spread use only a year ago and yes, Japan is BIG ECONOMY.

On Monday, Bitcoin has already recovered by nearly 9 percent, which makes total sense considering long-term forecast for the cyber currency is very encouraging.

For 2022, analysts are predicting a value of $25,000 or even more. Other experts pointed out the crypto currency could hit the $10,000 mark in the next six to ten months. Still thinking about that 20 percent?

Fort Financial Services