DCG’s bankruptcy, massive profit taking, and the return of inflation are the three reasons given.
The Bitcoin price has stabilized at a high level in recent days. The price rose above $23,000 and soon after fell back below this mark. The consolidation could be a first sign of a Bitcoin decline. What are the reasons why a crash is imminent?
The bitcoin price has seen another surge above the $23,000 mark in recent days. However, the price once again fell below this mark. Overall, there is more of a sideways move over the last 2-3 days, and the price seems to have reached resistance at $23,000.
Reason 1 for a Bitcoin Crash: DCG Bankruptcy
In the past few days, cryptocurrency lender Genesis filed for bankruptcy. The company’s difficulties had been known for a long time, and therefore, they ensured that the market did not react particularly strongly to this news. That was a bit surprising, as there was no reaction here, but the market was hit hard by the FTX crash.
The biggest problem is the Digital Currency Group (DCG). This is the parent company of Genesis, and one of the largest companies in the crypto space. Should DCG run into payment difficulties or even go bankrupt, Bitcoin’s fall should not be far away.
Reason 2 for Bitcoin Crash: Massive Profit Taking
In recent days and weeks, there has been a strong liquidation of positions in the Bitcoin forex market. Among other things, this led to the massive increase in the price of Bitcoin, from over $18,000 to over $21,000.
The forex market and especially leverage trading seem to be gaining influence again at the moment. There are currently many positions being opened betting on a fall in Bitcoin. If the price of Bitcoin falls again, these could dissolve, accelerating the fall in the price of Bitcoin.
Reason 3: Inflation is Coming Back
Rising inflation has boded badly for bitcoin in recent months, because BTC cannot benefit as the probability of interest rates increases, even though FIAT money devalues.
If a rise in inflation leads to a further rise in interest rates, this could trigger Bitcoin to drop below $20,000 or even below $15,000.
It should be remembered that to determine the causes of the fall, it must be understood that, for investors, these currencies are a high-risk investment. According to global macroeconomic circumstances, consequently, whales or large investors decide whether to buy or sell cryptocurrencies, in this case, Bitcoin.
In case you are interested in investing in Bitcoin, this seems to be a good time. It is only necessary to enter a trusted Exchange, to see the updated price in real time, organized by hours, days, weeks or years. This way you can study their trends and know when to invest. In summary, it is about doing your own research before making important financial decisions.
By Audy Castaneda
