The cryptocurrency markets are infamous for their volatility, but nothing has prepared Bitcoin investors for the roller coaster ride they are currently enduring. On May 9, Bitcoin fell below $30,000 for the first time since July 20, 2021, and although it bounced back somewhat, the value of Bitcoin is still 50% less than it was in November when it hit a peak of $68,990.90.
Bitcoin’s value dropped to $29,763.13 at 01:30 BST, the cryptocurrency’s lowest price in almost a year. The price rebounded to $33,741.10 at one stage before falling back to $31,579.42 at the time of writing. The market is most definitely a bear market right now. There is every chance we will see Bitcoin’s value fall into uncharted territory should the price continue on a downward trajectory.
El Salvador Buys The Dip
Some see the current low price as the perfect opportunity to top up their Bitcoin balances. El Salvador made Bitcoin legal tender on September 7, 2021, the first country to do so. Making the cryptocurrency legal tender means El Salvador residents can use Bitcoin to purchase goods and services just as they would with cash at a store. Of course, Bitcoin is widely used online, including at leading sportsbooks such as Betus, but having Bitcoin as legal tender is a major step forward for the cryptocurrency.
El Salvador took full advantage of Bitcoin’s reduced price by snapping up 500 coins at an average price of $3,744. It marks the first time El Salvador has purchased more than 420 Bitcoins in one transaction, in addition to the average price being the cheapest the country has invested.
Nayib Bukele, the El Salvador President, is a Bitcoin advocate and is embracing it fully. Bukele plans to build Bitcoin City near the Conchagua Volcana, allowing it to take advantage of geothermal energy to both powers the city and Bitcoin mining. Only value-added tax will be collected in the city, with no property or municipal tax. Furthermore, Bitcoin City will have zero carbon emissions.
Experts Make Their Bitcoin Price Predictions
The Bitcoin price drop follows the trend of the global markets struggling to hold their value. The S&P 500 traded down 3.2%, while the tech-heavy NASDAQ traded some 4.5% lower. Cryptocurrency has begun following broader market trends as traditional investors trade more freely with crypto and hedge their best against it.
Some industry experts predict Bitcoin investors could be in for a bumpy ride in the coming weeks and months. Edward Moya is a senior analyst at Oanda. Moya believes the downward trend is due to investors panic-selling while other markets slide.
“The recent crypto slide is strictly based on the tech share-led sell-off and not fundamentals for the cryptoverse. Bearish momentum could take bitcoin towards the $28,500 level, but that might start to be where some long-term bets come into play. The long-term fundamentals remain in place for Bitcoin, but a return to record highs will take a long time. Bitcoin will start to stabilize when the bloodbath on Wall Street ends, and right now, many investors are still in panic-selling mode.”
Valkyrie co-founder and chief investment officer Steven McClurg spoke to Coindesk TV on Monday before this latest price crash. McClurg predicts further slides if the US Government continues to raise interest rates.
“If the Fed continues to raise rates through June and July, we’ll probably continue to get markets going down all the way through the summer. My expectation is that due to midterm elections coming up in November, we’ll probably see the Fed pausing or even lowering rates starting at the September meeting, so that will be the catalyst. We could see the market going back up at that point.”