Bitcoin dropped below $50,000 on Tuesday afternoon. Just after 5 p.m., one bitcoin was trading for $46,056, a drop of more than 13 percent.
On Tuesday, El Salvador, as the world’s first country, introduced bitcoin as legal tender despite warnings from abroad.
Economists and international institutions such as the World Bank and the International Monetary Fund expressed concern, with experts noting that the cryptocurrency is extremely volatile and that users are not protected. The United States has asked El Salvador to ensure “orderly, open and responsible” use of Bitcoin and protect itself from “malicious actors.”
President Najib Bukele announced Tuesday afternoon on Twitter that El Salvador had bought 150 bitcoins after the fall. This means that the country has bought bitcoin for about 60 million Norwegian kroner.
Bitcoin has risen over $50,000 over the past week. On Monday, the cryptocurrency traded at over $52,000, the highest level in several months.
Shows the psychology of the market
This is a classic example of “buy the rumor, sell the news,” says Head of Analysis Bendik Norheim Schei at Arcane Crypto.
Today we saw a written example of predictions that accumulate and sell out on the day of the event.
He notes that there was high market expectations before El Salvador which now makes bitcoin a legal national payment method.
– Today we saw a sample writing of the forecast that accumulates and is sold away on the day of the event. The fact that the price went down on the day El Salvador switched Bitcoin to fiat shows the psychology of the market. If someone starts selling, many people start selling. In addition, many of the mortgaged jobs have been liquidated, he says.
Head of Analysis Bendik Norheim Schei at Arcane Crypto. (Photo: Skjalg Bøhmer Vold)
He hits hard when he falls
According to Norheim, there are a lot of pawned jobs that have been laundered. $2.6 billion in crypto in the last hour, and over $1 billion in bitcoin alone.
In the cryptocurrency market, you can have huge collateral up to hundreds of times. When it falls abruptly for the first time, it hits harder. There are many who have lost so much today, he says and adds:
We saw the same thing happen when Coinbase went public. Bitcoin registration day this year is the day Coinbase goes public, April 14th.
However, he does not rule out new Price records during the year.
That doesn’t change my thoughts about a new Bitcoin price high later this year. The cryptocurrency market is volatile, but it has historically been isolated for a country to offer bitcoin as legal tender in the same way as the dollar.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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