As always in the cryptocurrency market, fear and greed dominate the minds of participants. Amid ongoing discussions about Bitcoin’s future, a theory has emerged suggesting that the asset could face a significant decline in the near term as markets encounter a “black swan” event.
According to this theory, due to Bitcoin’s high liquidity, it will be sharply sold off as investors liquidate their positions to cover losses in other leveraged bets. This scenario would be particularly challenging for bullish investors and those holding leveraged long positions. However, it is also expected to lead to a strong V-shaped recovery, propelling the cryptocurrency to new all-time highs.
On the other hand, a well-known proponent of Bitcoin offers a different perspective. This prominent crypto pioneer notes that past trends indicate Bitcoin’s resilience even during severe market downturns.
He highlighted that during the last major market crash, Bitcoin demonstrated a robust recovery as soon as the U.S. markets reopened. He argues that this suggests it is unlikely for Bitcoin to drop below $50,000 during another potential market collapse.
Recently, Bitcoin’s price fell by more than 15% in a single day, reaching $49,000, its lowest level since the beginning of the year. The crash was driven by recession fears, as many market participants began liquidating their positions in cryptocurrencies, considered the riskiest of assets.
Read more US Authorities Transfer 10,000 Bitcoins to Coinbase Prime, Sparking Market Speculation”
As a reminder, the most recent round of cryptocurrency market crashes occurred at the end of the first week of August when Bitcoin experienced a sharp decline.
Important Notice: The content presented in this article is intended for informational purposes only and should not be interpreted as financial advice. Coinshibainu.com bears no responsibility for any investment decisions made relying on the information contained herein. It is highly recommended to consult with a qualified expert or financial advisor before making any investment decisions.
