Bitcoin, which had fallen to $58,692, recovered $3,913 in a day
The price of Bitcoin, which had dropped to around $58,692 the previous day, shows signs of recovery. Following a steep decline, the largest since the “FTX crisis,” it has climbed back to $62,605.
As of 9:20 AM on August 6, Bitcoin’s price on Upbit was $63,208, up 3.78% compared to the closing price at 9:00 AM (KST). CoinMarketCap reported the international Bitcoin price at $55,376. After briefly dipping below $50,000, it is now recovering rapidly.
During the previous day’s plunge, Bitcoin’s price fell about 30% compared to a week ago. Analysts are comparing this decline to the massive drop in March 2020, when Bitcoin’s price plummeted by 57% in just one week due to the COVID-19 crisis.
Like the rebound that followed the March 2020 crash, analysts suggest that the market may also experience another upward trend this time. Daniel Cheng, founder of the virtual asset investment firm Syncracy Capital, stated, “Ironically, this plunge has opened the door to an even greater bull market,” he expects the cryptocurrency market to recover relatively quickly.
Matt Hougan, Bitwise’s Chief Investment Officer (CIO), emphasized, “During the March 2020 crash, it seemed impossible for Bitcoin to recover. The media reported that Bitcoin had failed its test as a hedge asset,” yet the price did recover.
Crypto Fear and Greed Index, which indicates investment demand, hits lowest point in two years
The Crypto Fear & Greed Index, which gauges investment demand in the cryptocurrency market, recently hit its lowest level in two years. The sharp decline in virtual asset investments on the previous day contributed to this drop.
According to the virtual asset data platform Alternative.me, the Crypto Fear & Greed Index plummeted to 17 points on August 5, a decrease of 9 points from the previous day, signaling extreme fear.
The index ranges from 0 to 100, with higher numbers indicating greater investment demand. Last week, the index was at 74 points, suggesting greed. However, it fell nearly 50 points within just one week, highlighting a significant contraction in investment sentiment within the cryptocurrency market.
Bitwise CIO Calls Current Plunge a Buying Opportunity for Bitcoin
Experts have suggested that the current plunge presents a buying opportunity for Bitcoin.
Hougan emphasized to X that, in his personal opinion, the market sell-off that began this weekend was another buying opportunity.
He noted that having managed funds in the industry for over six years, he has found that such drops often come with opportunities. He cited the massive drop on March 12, 2020, during the pandemic crisis, which he called the best buying opportunity.
Hougan justified this by stating that COVID-19 did not change Bitcoin’s fundamentals. He pointed out that Bitcoin’s total supply is still fixed at 21 million and that it still doesn’t rely on banks or governments.
Also, Hougan highlighted that the current situation resembles that of March 2020. He explained that the calls for interest rate cuts from the Federal Reserve today are similar to those during the COVID-19 pandemic. He noted that similar scenarios played out during the 2010 Eurozone and 2008 financial crises.
Trump Says U.S. Government Should Not Sell Bitcoin
Donald Trump said yesterday that the U.S. government should not sell Bitcoin. According to The Block, Trump made this assertion during an interview with popular video game streamer Adin Ross. Last week, the U.S. government transferred over 29,800 Bitcoins associated with the dark web Silk Road to an anonymous wallet address.
Trump referred to cryptocurrencies as modern currency and compared them to artificial intelligence (AI). He added that if the U.S. doesn’t embrace this technology, China or another country will, emphasizing the need for proactive rejuvenation of virtual assets to avoid falling behind.
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