Crypto Market Crash?
Is it time to buy or sell? Is Elon Musk way too influential to manipulate crypto markets?
In the past 24 hours, bitcoin dived more than 30%, while it Ethereum fall more than 40%. Exchanges were down and thousands of websites that tracked price where inaccessible. Elon musk and China crackdown news flashed of course social media panic ensued the investors.
Bitcoin Week Chart
Ethereum Week Chart
Reasons for the crash:
The credit market sell-off appears to be driven by the concerns that several investors and institutions will be willing to buy bitcoin after Elon musk's influential tweets criticising and committing the largest crypto currency for its energy use and after effects on the environment. Elon musk launched a carbon capture competition prize $100 million in Feb 2021. Further on adding to news that China's regulators have restricting crypto use added to the bearish sentiment. Adding on, China having one of the biggest Bitcoin mining farm as some of the cheapest electricity prices in parts of China(4 U.S. cents per kilowatt-hour, a government-reduced rate), which is the primary reason miners are setting up shop here. China bans financial institutions from providing crypto related services. This action of their would affect the market ineptly.
What's happening now is bitcoin is recovering after touching $30000 and it Ethereum is recovering after touching $2000 signalling some investors are betting the sell of has gone too far or taking the chance to add at lower prices. Since we cannot boil down to a point to decide that a particular crypto asset is overvalued or undervalued we cant make an accurate call to buy or sell for a short term.
Worst mistakes to avoid in crypto:
Don't forget about the taxes, investing more money than you can afford to lose, not doing any research and being greedy about the profits, investing only in shit coins for short-term, not holding assets for a longer time and panic selling during the dip.