Crypto Crash: Bitcoin Bubble Pops, And Institutional Investors Return To Gold

It’s official: Bitcoin topped at $64,829 just one month ago in mid-April. Since then, it plunged nearly 50%, going as low as the $30,000 level. There is an onslaught of opinions on this Bitcoin bubble from major economic analysts to individual YouTube investors. Some people suggest that simple charts show this crash identical to 2018, and they also seem to believe the next rise will be higher than this one. But, skeptics are not so sure. Some even believe this is a classic manipulation because the chart for the BTC Futures contract aligns with a textbook definition of Wyckoff Distribution. Whether or not this was market manipulation, the Bitcoin bubble has popped for now, and it seems that investors are returning to gold

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Other cryptocurrencies also fell in line with Bitcoin, including Ether, Doge, and Litecoin. Ether fell sharply, winding up below $2,000. This is a more than 40% crash within a 24-hour cycle. This recent slump may be a reversal from the rise that began during the second half of 2020. Bitcoin is still more than 200% higher than where it was in September. This was a dramatic bull rally whose fuel was hedge fund managers, banks, and other major companies supporting the crypto market. With tax day, Elon Musk’s tweets, and the recent federal bans on cryptocurrency, this appears to be a massive liquidation event.

What Caused The Bitcoin Bubble’s Burst?

Turkey and China Ban Crypto

Back in April, Turkey banned cryptocurrency after suggesting that major irreparable financial damages could occur. Following the Turkish Royal Motors’ announcement that they would accept cryptocurrency payments, the central bank said: 

"[Cryptocurrency's] use in payments may cause non-recoverable losses for the parties to the transactions ... and include elements that may undermine the confidence in methods and instruments used currently in payments."

Traders responded by saying that these hard bans are often rare and hard to enforce. Similar bans in the past accomplished little in regards to banning Bitcoin. However, India also recently proposed a ban on trading and holding cryptocurrencies. 

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