Bitcoin’s price goes up and down very quickly. But why has it been going down recently? Even after the halvening and ETF approval, shouldn’t it be going up? The answer to that question is a bit complicated and controversial for some but will make a lot of sense in this blog. Let’s Dive in!
Before we start, we’d like to quickly say that this is our personal opinion and could be wrong. A lot of people think differently on why the Bitcoin price drops, and no one really knows exactly why.
Why is the bitcoin price dropping?
In our opinion, the Bitcoin price currently dropping has a very deep reason that not many people think of. This reason includes very high and wealthy individuals/corporations using their big Bitcoin holdings to crash the price in intent to buy more. These big whales know that Bitcoin will go up in the future and simply want to buy more Bitcoin at a lower price. Image you had 100,000 BTC in your wallet and wanted to buy more, but at a lower price, what would you do? You’d sell your holdings in coordination with other whales to bring the Bitcoin price down, causing a snowball affect of other holders also selling.
The Bitcoin snowball affect
The snowball affect is exactly what we explained above. Big whales sell, causing smaller Bitcoin holders to also sell their Bitcoin out of fear. This causes Bitcoins price to have a snowball affect, which is exactly the plan these whales had in mind. The plan for these whales is to bring the Bitcoins price as low as they possibly can (using people fears) so that they can buy up more Bitcoin at a lower price.
Fear & greed index
Now let’s dive into the Bitcoin Fear & Greed index. This basically shows if Bitcoin is at a state of greed or fear, hence being called the “fear & greed” index. As we are writing this, Bitcoin is currently at a greed level which is good, but also not. Once Bitcoin hits “Greed”, big holders AKA whales tend to sell as much as they have to bring the price lower, to buy more.
Who are these Bitcoin whales?
A lot of Bitcoin whales remain anonyms and make up a huge percentage of the overall Bitcoin supply. This is dangerous because the average Bitcoin holder cannot predict their next move. They are not on social media, their names aren’t public and they hold enough Bitcoins to bring the price down if they wanted to. The thing people do not realize is that these anonyms Bitcoin whales work together and coordinate strategic selling actions when they want. But do not worry, they only do this so they can buy up more Bitcoin that the average person would sell out of fear.
So what should you do?
If we were to give you advice on what you should do when Bitcoin whales coordinate selling strategies to bring the price down is NOT TO PANIC SELL. This is exactly what they want us to do. You need to stay patient and hold Bitcoin for the long run AKA Hodl! Hodling is a term the Bitcoin community uses that basically means “hold and never sell, regardless what happens”. The current price of Bitcoin is trading around $61,000 USD from the all time high of $71,000 USD about a month ago. Now the real question is, will these big Bitcoin holders keep dropping the price to levels even lower? The answer is maybe. No one truly knows where the Bitcoin price will go to next. But, we can guarantee that if you hold Bitcoin for years on end and never sell, you will see prices way above $71,000 USD.
DO NOT PANIC SELL
We can’t say this enough, DO NOT PANIC SELL. If you need to sell your Bitcoin to pay off dept or pay your rent etc then yes, sell your Bitcoins. But if you are selling straight out of panic, we suggest not doing that. If your goal is to hold your Bitcoin for years on end then you shouldn’t even be looking at the price in the first place (yes we know that’s hard) but it is the only way not to get scared.
So what’s next?
We cannot give a exact answer to what’s to come, but what we can say is that these whales know Bitcoins price will keep rising and the only reason they are selling is to eventually buy MORE Bitcoin. So at the end of the day, it’s a good thing, isn’t it? Wouldn’t you want these whales with diamond hands to hold Bitcoin or your neighbor with not enough money to pay their rent? exactly. These Bitcoin whales will hold their newly bought Bitcoins for decades to come VS your neighbor will buy Bitcoin for maybe a few months to a year. For the price of Bitcoin to reach 1,000,000 USD one day, we need these whales to hold as much Bitcoin as they can so that the average joe cannot have 1 whole BTC.
Do not panic, don’t sell, hodl and don’t look at the Bitcoins price everyday. That is our advice to you.
Conclusion
The Bitcoin price is strictly supply and demand, no one really knows where it will go next. What we stated above is our personal opinion on why the current price of Bitcoin has been dropping. Obviously there are many other external factors to why but in our opinion this is one of the main reasons.
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