Bitcoin’s value has fallen below $40,000 for the first time in over six weeks.
Near the end of Tuesday’s trading day, BTC values dropped by 16%, from almost $47,300 at the day’s start to a local low of $39,650 at around 9 pm UTC. Since Bitcoin’s local highs were above $50,000 on September 7, the price has dropped by 25%.
Before the current drop, Bitcoin had gone up by almost 80% from its low of $29,300 on July 20 to its high at the beginning of September. Bitcoin’s price has since returned to $42,000.
According to CoinGecko, the price of Bitcoin and 29 of the top 30 cryptocurrencies by market capitalization fell in the past 24 hours.
The drop in price is in line with what the Crypto Fear & Greed Index calls “severe fear” in the market. A month ago, this indicator meant “severe greed.”
Many vocal sceptics of cryptocurrency have used the recent market decline to make doomsday predictions, with Mr. Whale telling his 300,000 Twitter followers that “the bear market is here.”
Peter Schiff, who is known for promoting gold, said that the number of altcoins will grow faster than the demand for them until “the crypto bubble bursts.” Bitfinexed is worried that Evergrande’s credit problems could hurt Tether‘s reserves and the cryptocurrency markets as a whole.
Gary Gensler, the head of the U.S. Securities and Exchange Commission, compared stablecoins to poker chips and called for stricter regulation of the market, which caused the price to drop.
Nonetheless, many Crypto Twitter users report enthusiastic dip-buying in response to market activity, and some analysts predict a Bitcoin price recovery if prices can hold above local support.
Mike Novogratz, CEO of Galaxy Digital, stated on CNBC that he wouldn’t be “nervous” until Bitcoin (BTC) and Ethereum (ETH) both fell below $40,000 and $10,000.
Today, the price of ETH fell below $3,000. As he went on, he said, “I think the market is in good shape as long as these prices stay the same.”
William Clemente III, a well-known analyst, recently said that Bitcoin is unlikely to fall below $39,000 because of its liquid supply floor and “real-time scarcity.” This means that Novogratz is one of many who see the $40,000 as a critical support zone for BTC.