Bitcoin investors have been rocked by a price crash that’s wiped more than 50% from bitcoin’s all-time high. The bitcoin price, after nudging $65,000 per bitcoin in April, dropped to just under $30,000 last week before rebounding slightly, falling after Tesla billionaire Elon Musk expressed doubts about bitcoin and fear gripped the market China could crack down hard on bitcoin operations in the country.
Now, as bitcoin market sentiment plummets to lows not seen since the March 2020 coronavirus-induced crash that sent the bitcoin price to around $4,000, traders and investors remain upbeat that a recovery is on the horizon.
Last week, the bitcoin and crypto fear and greed index, where a value of 0 means “extreme fear” while a value of 100 represents “extreme greed,” fell to 11—down from over 90 earlier this year.
Despite the bitcoin price crash and the fear that’s currently gripping the market, many in the bitcoin and crypto community feel this correction is a “healthy” rebalancing, needed for the market to move higher over the long term. Anatoly Crachilov, the chief executive of investment manager Nickel Digital, said via email, pointing to bitcoin’s:
“The large falls in valuations seen this week are, in one way, healthy as they enable the market to clear excess speculative positions and consolidate before its next phase of expansion. 122% gain from the beginning of the year.”
The bitcoin price rally over the last few months has been partly driven by the long-awaited emergence of institutional investors, with bitcoin traders upbeat this latest crash won’t have diminished Wall Street interest in bitcoin.