Bitcoin recently retreated from $24,000 on its recent rise as many speculations were being made on Crypto Twitter, predicting a supposed Bull run. The crypto market was in a state of flux as investors were left wondering what caused such a sharp decline. A recent tweet by CoinDesk helps shed some light on the matter, revealing that a Coinbase executive knows the reason behind bitcoin’s drop from $24,000.
$BTC topped $23,900 on Sunday before retreating.
"In this case, given the timing … it's very likely only two players are involved," @Coinbase Head of Institutional Research David Duong says.
He explains what's behind the rally: https://t.co/jPFSKKNuyJ pic.twitter.com/D3o5a9p5qb
— CoinDesk (@CoinDesk) January 30, 2023
Brian Armstrong, CEO of Coinbase, one of the largest cryptocurrency exchanges in the world, took to Twitter to share his insights on the current state of the crypto market. He stated that the recent drop in Bitcoin’s price can be attributed to several factors, including profit-taking, a change in investor sentiment, and so on. He also noted that the timing of this particular pullback was probably due to the bull run being orchestrated by a few individuals as opposed to many during usual bull runs. He stated that these are low liquidity periods, and the short run and recoil might have been caused by someone who was trying to take advantage of the market.
Another reason that could’ve caused the drop is the United States Federal Reserve’s upcoming decision on monetary policy, set to be announced on February 1, as this could have a significant impact on the price of bitcoin. The Fed is expected to maintain its current monetary policy, which could lead to a further drop in the value of the U.S. dollar. This, in turn, could drive more investors towards Bitcoin, as the cryptocurrency is often seen as a haven asset during times of economic uncertainty.
It is worth noting that Armstrong’s statements align with those of other industry experts. Many believe that the recent drop in Bitcoin’s price can be attributed to a combination of factors, including profit-taking, a change in investor sentiment, and increased regulatory scrutiny. In addition, the current economic environment, characterized by low-interest rates and massive stimulus packages, has also been a contributing factor to the drop in Bitcoin’s price.
In conclusion, the recent drop in Bitcoin’s price can be attributed to many reasons, with a major one being the fact that the entire crypto industry is experiencing low liquidity periods, referred to as economic depression in the real world. The upcoming decision by the United States Federal Reserve could also have a significant impact on the price of bitcoin. Despite the recent decline, industry experts, including Brian Armstrong, remain optimistic about the future of bitcoin and believe that it will continue to gain widespread adoption. For those who believe in the long-term potential of Bitcoin, the current dip in price could provide a buying opportunity.