Bitcoin Crashes: Will it Bounce Back?

On June 22, the price of Bitcoin (BTC) fell below the $30,000 mark for the first time in 2021. This bearish move brought about a wave of panic among both institutional investors and casual traders alike, but just when BTC looked like it was going to park at $29K, seasoned traders jumped in to buy on the dip.

Even though the consensus among cryptocurrency analysts is that the market has not gone through a full cycle to justify a correction, one of the largest exchanges suspended Bitcoin withdrawals for a few hours as sell transactions piled up. Meanwhile the price of Litecoin also dropped below a psychological trading level on a day when a new wave of long orders failed to prove their hype.

This situation has left new buyers looking to jump into the market, but the data and analysis coming from Blockchain.info, an investment platform that seeks to act as a cryptocurrency's "foundation" does not suggest that things will get better right away. The best-case scenario right now would be a sideways market, but there are several indicators that hint at the possibility of a bear market period coming up.

Since mid-June, Bitcoin trading volumes on major exchanges like BTC China, Bitstamp, Bitcoin Cash, and Poloniex have risen and fallen wildly, but despite being only a tiny fraction of Bitcoin's market cap it remains one of the more valuable currencies in circulation.

The move towards building a cryptocurrency fund is a very bold statement for an initial project and a clear admission from the founders of BitGo. However, it's hard to say if this move is just a reflection of the new investment environment or if Blockchain.info is the real deal in terms of investing opportunity.

Either way, if you're looking to diversify into this growing segment of the investment market, BitGo is likely the place to look, but we should also be paying attention to hedge fund managers who believe that both Wall Street and the cryptocurrency markets are long overdue for a major correction, which means that the potential of a market crash should not be ignored.