Why did Bitcoin plummet in March (Will Bitcoin continue to decline in March 2021)?

Why did Bitcoin plummet in March? Today is the last day of March, and Bitcoin has experienced a significant drop since Tuesday afternoon. From the hourly chart, the BTC price has been rising for five consecutive days, breaking through the $10,200 mark (currently priced at $10,660), then quickly pulling back to around $10,000, but rebounding and falling to around $11,250 in the evening, and finally closing at around $11,150USDT.

We can see that as time goes on, there have been some unstable factors in the Bitcoin market, such as the recent delay by the Biden administration to impose sanctions on Russia, and the risks of the spread of the coronavirus. This has caused panic and doubt among many investors, leading to this plunge. However, it is not the case for Bitcoin, as it has been running at a low level since the bull market in 2017, and the continuous volatility during the period from late April to early May this year indicates that the price of Bitcoin has not changed much. However, if we look at the past year, Bitcoin has been constantly adjusting, and now it has become a “safe-haven” asset.

Why did the price of Bitcoin suddenly skyrocket? Many people believe that the main reasons for this waterfall event come from three aspects: first, the first large-scale market crash since 2018; second, the extremely high transaction fees of Bitcoin, which have caused some traders to turn to altcoins for profit. In addition, some analysts have stated that “Bitcoin may experience violent fluctuations in this situation,” but at the same time, others have predicted that “if this event actually occurs, it is likely to be a speculative bubble.”

Will Bitcoin continue to decline in March 2021

The price of Bitcoin has been slowly rising in the past few days. Recently, the price trend of Bitcoin has been comparable to that of December 2017. According to Skew’s data, March 2017 was one of the most attractive periods in the cryptocurrency market.

But at the end of February this year, as institutional and retail investors began to flock into the Bitcoin and other asset categories (including altcoins) market, the trading volume increased by nearly 30%.

So the question is, “Why did this situation happen in the third quarter of 2021?” It is still unclear, but there are two possible causes for this price drop. The first is the increasing fear of the traditional financial market. In addition, because Federal Reserve Chairman Powell is confident in the economic outlook and is unwilling to let the United States fall into recession, this may devalue the US dollar. Also, people are worried that the government will ban the use of digital currencies to protect themselves from the impact of the coronavirus, as they cannot control their savings, loans, and the profits obtained from gold as a safe-haven investment. “I think this is another reason for the stage we are in now.”

Therefore, if Bitcoin can maintain stability in the next three weeks, this trend has been strengthening since 2019. After reaching an all-time high on January 17 and falling back to the bottom, it returned to above $9,000 on January 19, and eventually surpassed $10,000 again. In early January, the price of Bitcoin briefly touched a high of $9,450, then continued to fall to around $10,700. However, starting from November last year, Bitcoin has been in an upward channel and soared to around $12,000, before entering the adjustment mode.

However, today it still seems to be receiving attention. As of the time of writing this, the price of Bitcoin is $10,025, exceeding $10,000 for the first time since the end of 2019.

At the same time, according to data from BitcoinTreasuries.org, the total trading volume of Bitcoin spot exchanges in the past 24 hours has reached $400 million. (Image source: CoinMarketCap)

It is also worth noting that the open positions of Bitcoin contracts have also seen a significant increase, reaching a historical high of $7.36 billion. However, this data does not indicate whether the bullish sentiment or bearish strength has weakened.

Original article source: ambcrypto, compiled by Blockchain Knight, English copyright belongs to the original author, please contact the editor for Chinese reprinting.