The crypto market has been consolidating around a market capitalization of approximately 1.15 trillion USD for the past few weeks. However, in recent weeks, the market has seen some turbulence, with Bitcoin prices falling below the key support price of $28,000. Why is Bitcoin down? Should you Buy Bitcoin now that prices fell dropped? Let’s analyze in this Bitcoin prediction article.
Why is Bitcoin Down?
Many analysts fear that the market may be up for another crash in prices, particularly after the Bittrex bankruptcy. The once-prominent cryptocurrency exchange was forced to shut down due to financial difficulties, causing concern among investors.
High Bitcoin Transaction Fees
The Bitcoin price could have dropped mainly due to the massive increases in transaction fees on the Bitcoin blockchain. Because of the BRC20 tokens, which can now be created by ordinals on Bitcoin. In the last few days, an extremely large number of people have been using the ordinals functions and thus massively filling the blocks on the blockchain.
Uncertainty around the Bitcoin Blockchain
Uncertainty surrounding the current state of the Bitcoin blockchain likely caused the price to fall below $28,000. We have to mention that direct damage to Bitcoin is very unlikely. With the increases in transaction fees, miners also get higher rewards, which pushes the hashrate higher.
Bitcoin Price Prediction: Will Bitcoin Crash to $20,000?
Despite these challenges, there are still many reasons to be optimistic about the future of cryptocurrencies. Bitcoin and other digital assets offer a unique value proposition, providing a decentralized and secure means of transferring value across borders and without the need for intermediaries.
Looking at Figure 1, we can see how Bitcoin indeed broke 28K lower. However, there is a much stronger support around 27K, and BTC is hovering between 27K and 28K currently. Previously, Bitcoin price managed to regain its price of around 30K from that area. This can happen again within the next few days if the buying power dominates in the crypto market. That’s why buying at the current price can be a good idea. However, it is important to set a SL level around 27K in case things turned south.